More Problems for XM
May 24, 2006 11:08 PM
comment(s) - last by
When it rains, it pours at XM
XM Satellite Radio is facing a bunch of problems recently. Earlier this year, XM's director Pierce Roberts Jr.
announced his resignation to the company
. Roberts said that there was increased tension between him and other executive board members and also warned that XM would be facing a critical situation down the road if costs weren't managed well. Later down the road,
XM was taken to court by the RIAA
. The company was brought to court because the RIAA claimed that users of XM's service are able to download tunes into portable XM players.
XM defended itself by saying
that its portable XM players do not allow users to transfer off music to other devices.
Unfortunately, the problems haven't ended for XM. This week, the company announced that its acquisition plans for WCS Wireless LLC have fallen through. Last year, the deal between XM and WCS was being put together so that XM could acquire WCS and obtain its technology as well as its frequency spectrum. Unfortunately, that deal took longer than expected and time has not been good to XM. The company's stock prices have dropped significantly since last year and unfortunately, this has negatively affected the acquisition. XM was to purchase WCS for 5.5 million shares of XM stock, which at the time was valued at roughly $200M USD. Now, the same amount of shares are worth less than half the original amount. From the official announcement:
At the time of the acquisition agreement between XM and WCS Wireless, announced July 13, 2005, the parties had expected to close their transaction by this time, with the timing dependent on receipt of necessary government approvals. Despite both parties' efforts to obtain that approval, it has not been forthcoming to date. Accordingly, XM and WCS Wireless have agreed to terminate the acquisition agreement in order to free WCS Wireless to pursue other alternatives for its spectrum licenses.
XM said that it originally
wanted to acquire WCS to expand its network offerings
. Audio, video and other content was in the works. XM has also been competing heavily against Sirius, which also offers competitive satellite radio services. WCS says that it hopes to find other companies to sell its technology to.
This article is over a month old, voting and posting comments is disabled
5/25/2006 10:54:43 PM
Ever heard of HD radio? Its CD quality, and atm commercial free in 99% of cases. Although it requires a new reciever, it is free (like current FM and AM stations). This technology (along with other improvements resulting in higher quality AM and FM radio) could possibly kill satellite radio.
5/26/2006 2:36:24 PM
Yeah HD radio is free and is CD quality, but you don't have the dozens of genres to choose from. Not to metion free speech. I personally subscribe to Sirius and can not imagine going back to terrestrial (standard or HD).
5/26/2006 9:56:29 PM
Yeah, I've heard of HD radio. I have heard that FM stations transmitting with it are drowning out adjacent stations. I have heard that it doesn't work at all on AM radio at night, and that a station transmitting HD on 1070 in LA will interfere with 1050 and 1090 in San Diego.
I've also heard that consumers will be asked to fork out $300 per unit for an untested product aimed at an unproven market. I've also heard that HD radio with faithfully reproduce 16, 20 or even 24 minutes of commercials per hour.
What a joke. HD radio is another big leap from the same tired people who brought us quadrophonic cound, AM stereo and an AMFM band that increasingly overcrowded, static-plagued and abysmally-programmed.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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