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.