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A monopoly in satellite radio is a big no says FCC

According to several reports, FCC chairman Kevin Martin said that it is very unlikely the FCC will allow Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. to merge. Both companies represent the two leading satellite radio entities currently in business in the U.S. and unfortunately, a merger in the eyes of the FCC is an obvious road to anti-competitive grounds.

Both Sirius and XM have been battling it out for the last several years, and in 2006 both companies saw their revenues drop as well as subscriber numbers drop. This peaked a notion in the industry that it was very possible that the two companies were in negotiations to go through a merger.

Share prices from both companies had dropped significantly in 2006, with Sirius shares dropping roughly 38-percent and XM shares dropping a whopping 46-percent of their value. Despite the shares dropping, the two companies continue to operate on speculation of a merger, which was also fueled by remarks made by XM CEO Mel Karmazin and chairman Gary Parsons. With their remarks, shares of both companies jumped last month but have since declined.

It is very unlikely, less than 50-percent chance, that Sirius and XM will receive FCC approval for merger, according to Martin.  Even so, both companies will have to pass anti-trust regulations and audits. "There is a prohibition on one entity owning both of these businesses," said Martin.

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Satelitte Radio
By bnme on 1/23/2007 2:09:36 PM , Rating: 3
The real competition is not each other, but against other forms of getting music into your car (or wherever you use your satellite radio). Traditional radio, iPods, CD's all compete for your ear.

It's almost like the whole cable companies vs. telephone companies, and the reason why AT&T is allowed to get back to being Ma Bell.

The fact that their are two different solutions for satellite radio alone is a pain to even move to it (sorta like Blu-ray vs. HD-DVD).




RE: Satelitte Radio
By masher2 (blog) on 1/23/2007 2:21:39 PM , Rating: 2
> "The real competition is not each other, but against other forms of getting music into your car ..."

Exactly so, which is why this merger makes sense. The FCC needs to reverse their stance.


RE: Satelitte Radio
By JeffDM on 1/23/2007 5:54:28 PM , Rating: 2
Exactly so, which is why this merger makes sense. The FCC needs to reverse their stance.

I don't really understand what they stand to gain by merging.

The satellites are very expensive and unless they can dump one of the two sets of satellites, then there's probably little cost reduction that can happen. Maybe they can reduce some of the licensing costs.

I don't know if a Sirius radio can tune XM, or if an XM radio can tune Sirius, but even if they can, they'll have to have them reconfigured before they can dump one of the satellite groups. If they can't be reconfigured, then I'd think that the new company would have to spend money replacing half the radios in the field or risk losing an untold number of customers.


RE: Satelitte Radio
By masher2 (blog) on 1/23/2007 8:29:26 PM , Rating: 2
> "I don't really understand what they stand to gain by merging"

Simple. That stops the bidding war they're in for content. Sirius paid $500M for Stern and $200M+ for the NFL. XM outbid them and paid $650M for MLB. They also have to fight each other for OEM deals with Automakers, distribution deals with vendors, etc, etc.


RE: Satelitte Radio
By mgambrell on 1/23/2007 8:52:32 PM , Rating: 1
They could stop that by everyone involved not being asshats. Is the only reason to carry MLB so you have a service your competitors don't? Why the exclusive arrangements? Theyre asshats for defining their service in terms of having things their competitor doesnt, when any moron can see that they are therefore going to lack things their competitor has. Since theres no real reason for one company to bid lower than another on something that should be valued the same to customers of either service (since the services are, all things considered, so indistinguishable that the customers are basically the same--in fact the customers get one or the other in their cars and have no CHOICE), the only reason one company gets the contract is because they gamed the situation differently. This chaotic gaming results in skewed valuations for different services and incredible wastes of money and enormous windfall for MLB.

Theyre asshats because theyre lazy and uncreative and the easiest thing they can think of to differentiate their products is in which big brand name services they carry. (Actually theyre quite different in sound quality, in my opinion, not objectively but just so that I prefer one crappy compressed sound to another--but try explaining that to a consumer)

Quit being asshats. Exclusion is pissing off consumers more and more every day. Define your service in terms of providing the coziest experience possible to your users. I understand that its a prisoner's dilemma, as to who makes the first move, which can be resolved by merging. But if you werent both asshats you could resolve it like gentlemen.

Actually, its probably for the best. Each service doesnt have the bandwidth for everything. Some of it needs to be only on one network, just to leave room.


RE: Satelitte Radio
By mgambrell on 1/23/2007 8:58:04 PM , Rating: 1
I would like to clarify. The only time the typical consumer understands the difference between the two services is when he discovers that what he wants to hear isnt on he service he has, or when he makes an original purchasing decision.

I hope I am just conspiratorially cynical when I propose that the reason for this arms race in exclusive content is that they each hope to clutch as many new subscribers as they can in each grab while neglecting the ones they already have who are mostly addicted and at their mercy. Once you have invested in a satellite radio and getting acquainted with it, there is a certain hesitancy to change. It costs a satellite provider less to lose a sweet exclusive deal than it does for them to pass the opportunity to grab a hot new one.

Strange how it works out, with the customers needs so completely contrary to the needs of the business model.


RE: Satelitte Radio
By masher2 (blog) on 1/23/2007 9:58:22 PM , Rating: 2
> "Why the exclusive arrangements? Theyre asshats for defining their service in terms of having things their competitor doesnt..."

Never owned a business, have you? You get ahead by differentiating yourself from your competition...not by offering exactly what they do.

If XM didn't offer a high-priced exclusive contract, then Sirius would, and lock it up. Worse, if they held talks and agreed to not bid each other up, then the government would step in, fine both for collusion and antitrust violations, and likely arrest a few execs for good measure.


RE: Satelitte Radio
By FITCamaro on 1/24/2007 6:54:48 AM , Rating: 2
Uh...thats what every company out there does. You differentiate yourself by having something the others don't.

I agree that the merger could potentially be good. Instead of competing you offer lower cost service by everyone being able to get everything and you don't need as many satellites which makes the service cheaper. The more customers to split the cost of a service the cheaper it is.


RE: Satelitte Radio
By othercents on 1/23/2007 3:54:53 PM , Rating: 2
Well the FCC actually hasn't ruled anything, but the chairman did say that it was unlikely to allow them to merge. This is because there will be markets in the US that would be monopolized because there isn't another radio option. In those areas the Satellite radio option could then charge a premium.

However if XM and Sirus can show that they are loosing customers and those customers are not buying a different Satellite system, then I don't see why the FCC wouldn't approve it.

Other


RE: Satelitte Radio
By mgambrell on 1/23/2007 7:28:12 PM , Rating: 2
I don't buy it. If they got caught charging those customers any more than everyone else, they would have hell to pay, one way or another.


XM FLS
By pauldovi on 1/23/2007 2:06:53 PM , Rating: 3
I have a XM radio subscription. That 100% commercial free radio is definately not commercial free. Well, I guess XM calls it promotionals, but as far as I'm concerned they are just as long and no different from a commercial. It is really a cheap shot of XM to advertise on XM and then rename them "Promotionals".

XM won't get my re-subscription, maybe that is why they are losing all their customers.




RE: XM FLS
By AlexWade on 1/23/2007 2:40:22 PM , Rating: 2
100% commercial applies on the stations owned by the company. How on earth is XM supposed to remove commercials from ESPN radio? Or rebroadcasts of other stations? Think about it.


RE: XM FLS
By v3rt1g0 on 1/23/2007 2:58:52 PM , Rating: 3
No, I believe he's talking about when you hear promotions for other XM radio programs. These are done even on the specifically stated "100% Commercial Free" channels.

For example "Check out Theme Time Radio Hour with Bob Dylan on XM40, Wednesdays at 10AM Eastern" is heard on all XM stations, and does count as advertising, imo.


RE: XM FLS
By pauldovi on 1/23/2007 3:17:27 PM , Rating: 1
This is not what I am talking about at all.

XM has changed their slogan to "The more commercial free radio" from "100% Commercial Free Radio".

They have advertisements on their music channels. I hear ads for the discovery channel, some hair gell, and Dell on my way to school today.

XM Sucks.


RE: XM FLS
By slacker57 on 1/23/2007 3:25:29 PM , Rating: 2
Well, I don't know about XM, but Sirius' slogan is "Commerical Free Music," not "Commercial Free Radio," so that's what confuses some people when they're listening to talk radio stations.

But I guess you said they play commericals on the music stations over there, so maybe now I do know about XM :)


RE: XM FLS
By agent2099 on 1/23/2007 6:57:03 PM , Rating: 2
quote:
both companies saw their revenues drop as well as subscriber numbers drop



Didn't Sirius go from 600k subsrivers in 2005 to over 6 million by the end of 2006?


RE: XM FLS
By dryloch on 1/23/2007 11:36:40 PM , Rating: 2
Sirius is gaining a ton of customers and if anyone is "hurting" it is XM. Within 6 months to a year at most I can pretty much guarantee XM will be number 2 behind Sirius. Then watch what happens to the price of Sirius stock. I am getting my bonus in March and I am dumping the whole thing into Sirius stock. I hear the numbers frequently of how Sirius is doing vs XM on the Stern show. Howard is counting down the days till they take the lead over. He is so sick of people saying Sirius is a failure because they only went from 600,000 to 6 million in one year. They also went from being outsold 3 to 1 to being the one who is outselling XM by that same margin. This is even more impressive because they have barely any advertising and what they do have is not very good. I walk into a bunch of stores and the XM system is hooked up but the Sirius is not. Imagine what would happen if they really got it together.


RE: XM FLS
By Dmitheon on 1/24/2007 9:19:41 AM , Rating: 2
I am getting my bonus in March and I am dumping the whole thing into Sirius stock.

Ok, this is a really bad idea. You're source for info is a completely biased, and if you are wrong, you are really hurting. Remember the stock price isn't about how the company is doing, it's about how it's doing compared to expectations and even then the corralation is loose at best. By all means, put some in sirius, but invest in some other things as well to help balance your risk.


Sirius FTW
By therealnickdanger on 1/23/2007 2:18:04 PM , Rating: 2
I'm on my second year with Sirius. No commercials and lots of great underground stuff, B-Sides, custom mixes, live sets... It's really fantastic.

My only gripe with satellite radio is the pisspoor quality. I've got 96K MP3s that sound better. But maybe I'm spoiled since most of my collection is 320K VBR or lossless. Either way, the distortion with some stations is terrible. Sometimes FM is better...




RE: Sirius FTW
By jamesbond007 on 1/23/2007 3:29:02 PM , Rating: 2
I am only going on my second month of SIRIUS, but I agree with everything you said 100%. I find SIRIUS to be better than XM for me, but the quality of both XM and SIRIUS stink sometimes compared to low-bitrate MP3s or even FM.


RE: Sirius FTW
By Chudilo on 1/23/2007 3:52:59 PM , Rating: 2
Actually the data stream is about 48k per channel, and they do use a compression method that is slightly better then MP3.

But you're absolutely right, any MP3 over a 64k MP3 will sound noticeably better then Sirius and XM.
FM ALWAYS, not sometimes will sound better then Sirius (with the exception of talk, where it doesn't matter), as it has no compression whatsoever and provides a much higher bandwidth.

To this day I still can not understand who thought people would be willing to pay monthly fees for new technology that sounds a lot worse than something that's been out there for so many years for free.

Free radio in US is worthless, which is why it's free.
And yes many of us would love to have something better to listen to, but until that something provides a service that would be so much better, that would render conventional free radio obsolete, who in their right mind would Pay for it.

Satellite technology needs to be improved to beat the quality of FM, plus provide content that I would conscientiously switch to, I will not even consider it until then.

By providing the extra content, they may have achieved the first part of the minimum necessary to get people to switch.
Meaning they got people to buy the equipment to see(or listen) if it's really that much better for themselves, but once people heard it, they don't feel like it's worth the extra money because content alone is not enough.
Thus once the initial contract ran out, the customers were gone as well.


RE: Sirius FTW
By Chadder007 on 1/23/2007 4:58:02 PM , Rating: 2
Seriously? I always though that Satellite Radio was all about Quality and No Commercials. If the quality really sucks like you say, then why in the world are people getting it, unless to listen to some rare finds that don't play locally on FM.


RE: Sirius FTW
By WxGuy192 on 1/23/2007 5:26:23 PM , Rating: 2
I signed up with Sirius just under 1 month ago. Like someone else, I like it but don't love it. The biggest downside to me is the sound quality. Unfortunately, that's a byproduct of the larger number of channels available (you only have so much bandwidth, so more channels means less bandwidth per channel).

Again ,however, I do like it. I like having a ton of channels available. In my local area (Oklahoma City), there's only 4-5 stations that I'd ever listen to, unlike the 15-20 stations that I frequently listen to on Sirius. I also like being able to instantly get artist+song name information, and I like being able to browse the channels by artist or song. Yes, I know digital broadcast radio gives artist and song information (RDS has been available since the 90s in some markets), but I haven't seen a radio that lets me quickly and efficiently scroll all artists playing like I have with Sirius (Sportster 4, which also has artist alert, song alert, and game alert). I'm a college football fan too, so satellite radio comes in handy! I can't turn to my local stations and expect to listen to 4-5 ongoing games, particularly if a local team is not playing.

I certainly find that there are far less "promotional commercials" on the channels that do have them than regular commercials on broadcast radio. The majority of music stations I listen to on Sirius have no commercials or promos, while a few of the talk stations (ones which simulcast from TV, like CNN Headline News and CNBC) do have 'regular' promos (but then again, they need to use the time that the TV stations are on commercials).

Why choose cable TV when you have broadcast /over-the-air TV? There isn't really a quality difference unless you live in the boonies where broadcast is difficult to receive; in fact, the compression artifacts I see during sports on satellite TV drive me crazy! Sure, there are many programs on cable TV that aren't on broadcast TV, but that holds true for Sirius vs. broadcast radio as well. In the end, I think many people choose cable TV because for the variety and choices. More stations mean more variety (generally!) -- I can usually find SOMETHING to watch on cable TV, even if there's nothing on broadcast. Similarly, I can usually find something good to listen to on Sirius when the 4-5 stations I'd otherwise listen to over-the-air are playing commercials or songs I don't like. Again, the cable TV - satellite radio metaphor doesn't hold perfectly, but I also pay 1/4 of the price for Sirius as I do for my Cable subscription. I spend 90 minutes in my car every day, so I'll pay for the variety Sirius provides.


RE: Sirius FTW
By EglsFly on 1/23/2007 11:26:22 PM , Rating: 2
I agree 100% with WxGuy192.
People complained when cable came out that they wouldn't pay for TV when it was free over the air. Well we all know how that turned out. When provided with choice, that is NEVER a bad thing. If you don't want to pay for more channels and no static, then don't. Stick with your local channels.
Maybe if my area had some decent programming I wouldn't have tried satellite radio. Fortunately I had a choice, so I tried it and won't be going back.


RE: Sirius FTW
By Lakku on 1/24/2007 3:49:18 AM , Rating: 2
Then maybe you should try HD radio, if you have it in your market. It's like regular radio broadcasts, only in near CD quality. But I guess if you don't like your local stations already, then it might be useless to you, but its still an option.


Stock
By gramboh on 1/23/2007 5:34:04 PM , Rating: 2
I feel sorry for the shareholders that held on through the hype period. I think satellite radio will be dead within 10 years, probably 5, when wifi is more widespread to all major cities in North America. Think about it, once you have a city wide subscription to fast wifi, you can just stream music content from your home PC over internet without paying a monthly fee (other than data rates if the wifi isn't flat rate). Plus you could have full internet functionality in your in-car console for google maps etc and whatever else you wanted to do. Bye-bye subscription crap like this. I see both companies transitioning to pure content providers over wifi at that point, but will they recapture the capital outlay on satellite hardware I wonder under a new business model.




RE: Stock
By mgambrell on 1/23/2007 7:31:36 PM , Rating: 2
Don't make me laugh. muni wifi wont even cover a fraction of large cities. Not to mention the distant suburbs and rural areas. Satellite radio will last forever, now that these guys have proven that it can work, simply because it can broadcast to every nook and cranny of the country (except under an overpass). That power should not be overlooked.


RE: Stock
By gramboh on 1/23/2007 8:06:55 PM , Rating: 2
Maybe not right now, but it will within 5 years, no question about it, too much money to be made. Once all major cities have good coverage, who cares about the tiny market of rural areas.


RE: Stock
By mgambrell on 1/23/2007 8:42:07 PM , Rating: 2
You telling me once theyve invested so much money in building these satellites and receivers that theyre going to throw them away in favor of taking their content over muni wifi? You're still insane. It costs them next to nothing to transmit over muni wifi. They can tack that onto their product portfolio and take advantage of brand recognition without it having anything to do with their satellite market.

So are you saying that urban users, when confronted with muni wifi, are going to toss out their satellite radios and thus cause the subscription levels for satellite service to plummet, rendering it unprofitable? Baloney. You can't take your muni wifi broadcast service on the road. Enjoy not having your favorite stations whenever you drive more than 10mi (optimistic) from town. Sure, they take the hit from folks that listen at their office and nowhere else who will switch to an internet service. But I think thats the minority. In the meantime, your incredibly underestimated numbers of people who have nothing to do with an urban core will keep on paying for their satellite service, whose rates can go up over time as people get more accustomed to paying for services that used to be free.

Actually, the only technology that has a chance at being a functional replacement enough to unseat satellite is cell-based data services which will be upgraded to unimaginable levels due to faaaaaar more demand than muni wifi to the point where they can afford to stream you your own channel 24/7.



RE: Stock
By masher2 (blog) on 1/23/2007 10:00:52 PM , Rating: 3
> " Think about it, once you have a city wide subscription to fast wifi, you can just stream music content from your home PC over internet without paying a monthly fee..."

Err, you can already listen to your entire home music collection in your car. That's not what radio is all about...its about listening to content you don't already possess.


RE: Stock
By theways on 1/24/2007 1:02:40 AM , Rating: 2
Hah, thats rich.

I drive cars for a living, and about half the vehicles I drive have satellite radio, (mostly XM, bout a 2 to 1 ratio). However, just about anyone who uses their vehicle for hauling (hotshotting) or business travel always have satellite radio.

you're not gonna get Wifi internet radio on a 5 hr drive from Dallas to Houston, let alone more rural areas. And even thou hundreds of thousands of people may live in a big metropolitan area, doesn't mean they also work there, and that half-hour, hour drive to/from work each day would be pretty boring listening to static because you can't pickup your internet radio station after the first 10 minutes.

And if you think that only a small portion of the population fits into these categories, you are sorely mistaken. Wifi internet radio would be cool, but until they can spread it literally to ever square inch of the map, it will never be able to beat satellite radio.

Personally I listen to XM about 5-6hrs a day when playing EQ2, and I have yet to hear a "promotion" from one of their music channels (broadcast through directv). Squizz/Liquid Metal FTW.


So...
By phideo on 1/23/2007 2:09:01 PM , Rating: 4
The title implies that the FCC has authoritatively said "no" to the XM/Sirius merger, while the body states that the FCC has yet to make a final judgment, saying that it is "very unlikely" that the FCC will approve the merger.

A little sketchy, guys.




RE: So...
By UNCjigga on 1/23/2007 3:13:45 PM , Rating: 2
IMHO digital radio will pwn them both. The only problem is car makers aren't getting the fat subsidies to option an HD radio tuner like they do with XM and Sirius, so adoption will be slower. But anyone who's heard HD radio knows it sounds 100x better than satellite, and best of all its FREE once you've got a tuner. I guess XM now has XMHD but that requires a new tuner too. Europe still has it best--standardized digital radio using MPEG-based codecs.


RE: So...
By kamel5547 on 1/23/2007 4:06:01 PM , Rating: 2
Right... but you still ahve the commercials, which is what most satellite subscirbers are trying to escape.


RE: So...
By EglsFly on 1/23/2007 4:54:12 PM , Rating: 1
There are no commercials on the Sirius MUSIC channels.


I know why they're losing subs...
By Spivonious on 1/23/2007 3:29:37 PM , Rating: 2
...the answer is iPod.




By WxGuy192 on 1/23/2007 5:43:44 PM , Rating: 2
It depends what you like... For me, I don't want to spend loads of money to legally possess enough music that I don't get bored. I like not knowing what song is coming up, and I like not having to spend a lot of time and money to keep my music up to date. If I do have a huge music portfolio, I wouldn't want to spend the time to make playlists for the type of music I like. For example, suppose I'm in the mood for rather low-key country music (or hip-hop, or whatever). I could either spend a lot of time to make a playlist for that, or I could just random-play and advance until I stumble upon a song that fits that description. When I'm driving, that's not something I want to mess with. If I'm in the mood for 80s music, there's a good chance I know the songs but not the artist+song name, so downloading is difficult.

Of course, it'd be easier if I had lots of time to make playlists, felt less distracted when scrolling through songs while driving, and didn't have a problem spending the money to download hundreds or thousands of songs (or steal it, as many folks do), I'd be up for a mobile audio player. But, I'm not, and that's just a personal preference.


RE: I know why they're losing subs...
By mgambrell on 1/23/2007 7:36:16 PM , Rating: 2
I switch between my 60G iriver and sirius depending on my mood. As the earlier reply to your post states, I place an incredibly high value on having no idea what songs are coming up next. Besides paying for sirius, I donate $100/yr to a single shoutcast stream that doesn't even ask for donations.

The temptation to skip crap is too hard when you load up your mp3 players. Then you never find anything new. I also listen to my mp3 player on album at a time on shuffle so theres no way I skip tracks I don't like. How else would I ever discover I like them?

When youre dealing with non-payola radio, the music that plays is mostly good, even if you dont understand it, and sometimes you have to hear something a few times before it clicks. You miss out on that entire experience if you stay stuffed in your ipod.


By Spivonious on 1/24/2007 11:12:16 AM , Rating: 2
Oh I don't have an iPod, or any MP3 player for that matter. Just stating my opinion on why satellite radio is in trouble.

For me, I also enjoy not knowing what's next. I also know for a fact (since my friend has Sirius and my sister has XM) that they have no channels for the kind of music in which I like to discover new bands.

Maybe it's because we have a pretty good classic rock station around here that does 10 songs in a row? I don't mind hearing commercials, especially since it's free to listen to.

Good for you on your donation, but it's generally considered extremely tacky to state to the world that you donated something, i.e. "Look at me, I'm great!"


By RamarC on 1/23/2007 2:06:45 PM , Rating: 2
xm nor sirius may survive in the long run since they were losing money while adding subs. now that the sub rate is declining, merging makes sense.




By IGBT on 1/23/2007 2:24:21 PM , Rating: 2
..satellite deployment and terrestrial interface are enormously expensive. has anybody done the math and determined what the breakeven subscription level is?


By mgambrell on 1/23/2007 7:40:29 PM , Rating: 2
Your analysis makes no sense.

If you have 100 million subscribers, and add none, then you are making money. The subscriber add rate is mostly irrelevant to whether you are making or losing money right now. In fact, if anything, a high add rate costs them more, as it takes investment to gain and setup those subscriptions. Once you quit adding and start maintaining, your profit increases.


Missing the Point from Geosynchronis Orbit
By Pete Moss on 1/23/2007 7:41:41 PM , Rating: 2
The point behind this delivery system is no different than the point behind sattelite delivery of anything else. It creates a homogenous product coast to coast, so I can drive from DC to LA and hear the same show the whole way no matter where I go. Just like McDonalds.

Now throw in a lack of FCC control, the ability to live beyond the ratings generated by an antiquated Arbitron system, and grow/run the business based on the quality of the content as it appeals to paying subscribers and you have a nice business model.

Regular AM and FM radio are not technically inferior, and thats not the point. The signal that an FM station can produce is exceptional as is the sound quality potential. But that has never been the issue here.

As a subscriber to both XM and Sirius, I want choice. Period. And I get it with each of them. What I dont want is 22 commercial units per hour and some lame on-air "personality" ruining the experience for me.

The FCC's approach to B'casting has hurt radio severely. Not just for the Howard Sterns of the world, but the small market radio operator that is now scared to death of losing his license or incurring a huge fine if one of his DJ's has a verbal malfunction.

The fact that most of all commericial radio is controlled by a small handful of companies now, much like back in the 30's and 40's, the risk to revenues and shareholders is so great because of the FCC that these ownership groups have screwed the lid down so tight that even the music is getting delisted, not just bleeped, for fear of a fine.

The technology of XM and Sirius also has other delivery capabilities like video and data.......and everyone seems to think that video and data beamed from a bird is a great thing right? So, whats the deal here from all the nay-sayers of this infant medium?

A merger between XM and Sirius may or may not be good for anyone or everyone, and right now who cares really? The quality of the content will be the deciding factor and right now both have plenty, and its much better than most of the terrestrial market. The music and talk options dwarf any terrestrial radio offering in any american city. If I want to hear Frank Zappa or Fats Waller, I wont find them on commercial radio anywhere, and its not because they dont have value, they just dont have enough to work in the terrestrial radio model today. Which is why terrestrial radio has more to fear from the Ipod than XM or Sirius.

Current radio management (terrestrial) are like a deer in the headlights, they are faced with a rapidly changing comfort zone that requires rapid and thoughtful reaction. Thats something that radio management has forgotten how to do in recent years because the ad revenue and audience was there. We'll now its going away, fast. If they cant post a win in 90 days or less they are dumbfounded. Radio is the victim of its own shortsightedness. Horrible for a medium that used to pride itself on the ability to be constantly reinventing itself.

Both XM and Sirius are free to start naming Channels for respective cities like Chicago or DC and create content and on-air delivery just for those markets and just like regular radio if they like. Personally I enjoy driving between Philly and Boston and never having to hit the dial to find a new station. Is it worth $13 a month for that alone, no, but when you combine it all together, and eliminate hours and hours of really poorly produced radio ads each week, the answer is yes. Yes that is unless you place no value on your own time, and I've listened to my last 8 minute long commercial break on regular radio.




RE: Missing the Point from Geosynchronis Orbit
By alifbaa on 1/23/2007 11:29:30 PM , Rating: 2
I agree with everything you say except for your assumptions about consumers' interests in signal quality. I don't think (and I believe the sales numbers bear me out on this) that there are nearly enough people making routine long-distance trips that are willing to spend the money on satellite radio, especially if it includes "promotionals." This is especially the case when you consider the (free) low cost of owning music these days. When you consider all this, the homogeneous advantage you described begins to look less and less significant -- and yet this was one of the biggest things XM used to attract investors when it got started. On top of all that, I'm no audiophile, and yet whenever I've listened to XM, I've been quickly fatigued by the lack of quality in the sound. I think it's much more comparable to listening to one of those wacko country stations you find on AM in the middle of Arkansas. It wasn't just bad, it made me want to turn it off. As a result, I've never really considered getting a subscription to XM.


By Pete Moss on 1/24/2007 3:35:49 PM , Rating: 2
I think that you missed my line about the long distance trips. I said that that benefit alone was not necessarily worth the $13 a month, but that all in, the features of satellite make it worth it.

I listen to lots of talk on XM and Sirius.....NPR, CNN, Howard, BTLS, etc, so I am easy on the concerns over streaming quality. Since the music I listen to goes through my PC and into my home audio, I can monkey with it to improve the audio. Going direct from the receiver into my audio stack is even better, so I really can live with what both XM and Sirius crank out. Does it match my digital IPOD or ZEN or my hard drive, maybe not, but it gets me more choice faster........

I also stated that terrestrial radio has more to fear from the IPOD than they do from XM or Sirius........take a look at how the 12-34 demographic consumes music......it aint via XM or Sirius.......but since the FCC doesnt regulate your IPOD, the whining exec's at the major radio companies run to the skirts of the FCC to complain about the easiest target to distract the industry from the fact that terrestrial radio content has been in free fall for some time and it is now becoming impossible to hide.......


Full of Inaccuracies
By deadrody on 1/23/2007 3:56:47 PM , Rating: 2
First of all the FCC is doing nothing more than speculating here. If a non-elected board of government hacks thinks they will have the last say on what 2 companies do, before they even propose doing it, they are as dumb as their Janet Jackson pursuit would suggest.

Second, the Sirius subscriber numbers are not dropping in the least. They started 2006 with 3.3 million and ended with 6 million. And with that increase in subsribers, reached a positive cash flow in the 4th quarter of 2006. I couldn't care less about XM, nor could a lot of people. Might explain THEIR desire to merge with the up and comer that is Sirius.

Mel Karmazin is not the CEO of XM, but the CEO of Sirius. Pretty simple fact to overlook.




RE: Full of Inaccuracies
By banshee164 on 1/24/2007 10:56:19 AM , Rating: 2
Ummm, where'd you get that positive cash flow for 4Q from? They don't report their earnings for another two weeks. And there isn't a single analyst out there expecting them to have positive earnings per share this quarter... Neither XM or Sirius is going to have a positive cash flow for years to come.


Didn't they *create* the market?
By rtrski on 1/24/2007 9:34:40 AM , Rating: 2
I'm curious. Before either started, and they were talking about upcoming satellite radio, I remember a lot of people saying "PAY for radio? Why?" Yet one company created a product and a completely new market. A second follows. Then they find either the market isn't big enough for two, or one has done a much better job than the other and it makes financial sense to collapse back down to one as the other throws in the towel but does what it can to get some money out for its investors (and maintain service for its customers).

Yet this is giving one company a "monopoly"? On a market that did not exist previously?

I'd think anti-trust monopoly measures should be reserved for things that people absolutely need. Admittedly the definition of 'need' can change (no one 'needed' computers in the 1950s outside of a very small number of government and academic realms, yet today clearly the processor market does require some competition to prevent monopolistic practices, given the prevalance of computers in modern society). But does satellite radio really rate that category?? Unless terrestrial broadcast radio has ceased to exist in the corresponding areas (and depending on your opinion of ClearChannel, maybe you think it is indeed dead and gone <grin>), I sincerely don't understand the concern.




By Pete Moss on 1/24/2007 3:46:54 PM , Rating: 2
Agreed:

The monopoly play here by the FCC is just pandering to the major radio ownership groups. It does not pass the "reasonable man" test and the FCC knows it. Should Apple be cited for monopoly status in the MP3 industry? No mention of monopoly status whenever giant oil / gas companies want to merge....its just regular old free market economics then.......

The FCC is growing increasingly irrelevant with nonsense like this. The major radio ownership groups could easily step in and invest in stock equity in either XM or Sirius, if XM (they did with Clear Channel) or Sirius would let them or as normal arbitrage type investors.....and would the FCC step in then? Not likely that I can see.

I'm quite sure that the FCC would lose a court case in this matter. They remain hung up on a few points over satellite and one of which is clearly and bizarrely, Howard Stern. It seems that they cant live with the guy no matter where he is, and neither can the radio groups. Its just sad.


XM Radio
By Nick5324 on 1/23/2007 3:41:17 PM , Rating: 2
I've had XM for a couple of years. I like it, but I don't love it. The things that put me off:

1) Same artist or song, different station. While just flipping through stations, I'll hear the same artist, or even the same song, on two stations at once. This is bound to happen, but it seems to happen fairly often.

2) For certain DJ's/shows, I'm no longer given the artist and song title of what's playing, instead it's just 'DJ's name/Whatever he calls his show'. I don't care about that, I want an artist and song title.

3) A few weeks ago, I noticed 3 or 4 stations now have a "cm" suffix, meaning they have commercials. I'm paying a monthly fee to not have commercials, so this will probably make me walk away from XM. While the "cm" stations aren't ones I really care about, it's only a matter of time before it spreads to more stations.




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