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Ethiopian-born Noah Samara is founder and CEO of WorldSpace, an international satellite radio service that is partly owned by XM.
A founding father of satellite radio tells DailyTech that the XM-Sirius merger would create more choice -- not less.

Noah Samara, CEO of WorldSpace, says that for satellite radio to thrive, the FCC must approve the merger of the only two satellite radio broadcasters serving North America.

Samara was involved in satellite radio from its inception. He was instrumental in developing and licensing key technologies for the launch of XM in the early '90s before turning his attention to creating satellite radio services for Africa, Asia and Western Europe. In an exclusive interview with DailyTech, Samara called on regulators to support the merger and look for alternative ways to ensure that consumer interests are protected.

"There are other ways of ensuring that the consumer is not price-gouged," Samara said."The FCC could find those ways and ultimately benefit the public interest."

The biggest benefits will come in the form of new and innovative programming, made possible by the economic efficiencies XM and Sirius will realize as a merged company, Samara said. In the current situation, both companies are hemorrhaging money because of the exorbitant sums each must pay for premium content, he said. "In a duopoly, each player is doing everything it can to undermine the other."

Sirius' and XM are "not profitable because, though the product is good, bringing it to the consumer has been very expensive," Samara said. He cited examples such as XM's $650 million, 11-year contract to broadcast Major League Baseball and Sirius's 5-year, $500 million-plus package to lure Howard Stern away from FM radio, making him perhaps the best paid "talking head" in the world. "This one-upmanship has driven up the price of the content and therefore the ultimate breakeven point for the business," Samara said.

By ending the content bidding war between the two companies and allowing them to reduce costs by eliminating redundancies in their operations, the merger could usher in a "new golden age of radio -- except this time on steroids," Samara said.



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more choices
By Moishe on 4/12/2007 1:49:28 PM , Rating: 2
A merge would offer more channels/choices. Not necessarily lower prices. The channels per dollar number would go up and the overhead costs of running two companies (if they're smart will go down). This will end up in a more efficient company for sure and maybe in time there will be a price drop but for now they need the money. A business that loses money with no end in sight is no business at all. It may be that they need to charge $45/mth to break even, but whatever that number is they have to charge at least that much at some point or the whole business is pointless. Some businesses or products simply are not viable and this may be one of them. They are having a tough time trying to sell pay-to-listen radio to a few generations of people who have always had free radio.

The true question is, will they abuse their monopoly or not. Frankly I don't mind a monopoly now and then, but a monopoly is mainly bad when it's abused.




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