XM and Sirius: The Battle for Merger Approval
September 19, 2007 2:29 PM
comment(s) - last by
Both companies have a tough crowd to please before their merger can go through
Since the rumors of the XM and Sirius satellite
radio merger were confirmed in 2006
, the two entertainment providers have been met by resistance from the
National Association of Broadcasters (NAB)
. The two providers state that the merger, along with their
proposed a la carte plan
, would drive costs down for consumers, as well as offer more options for content.
However, in the face of the NAB's protests, XM and Sirius aren't the only entities in favor of the merger. The Parents Television Council, a group of lobbyists, feel that the merger would not only benefit consumers with more affordable subscription options, but contends that the proposed a la carte programming can be used to block adult programming, a very favorable option for parents.
The merger still has a few hurdles on the track. The Department of Justice has yet to rule that the merger
does not break anti-monopoly laws
, and this appears to be the backbone of the NAB's case against the providers. The NAB argues that a merger would, contrary to XM and Sirius's plans, eventually drive the cost of programming upward as well as provide fewer program options and less local programming to subscribers.
The second major obstacle lies in FCC approval of the merger. The companies recently convinced former FCC chairman Mark Fowler of their need and he stated in a New York Times article that if the companies “need to combine to be more effective competitors in an audio entertainment marketplace teeming with technological change and innovation, the government should not stand in the way.” What remains for the satcasters is convincing the current FCC chairman, Kevin Martin.
In recent interviews, both companies' leaders came across as optimistic of the merger. Mel Karmazin, CEO of Sirius Satellite Radio felt confident that the FCC and DOJ approvals would come, as well as shareholder approval. Gary Parsons, chairman of XM Satellite Radio conveyed that though he feels the merger will be approved, XM does not need the merger – it will be beneficial to the provider, but not necessary in the face of their climbing subscriber growth.
The satcasters' line of reasoning lies in that the merger will allow customers more choice at a better cost, while allowing the companies to be more profitable and move forward with technology and more strongly into other existing markets such as streaming mobile and internet radio. They will need this profit margin and technology to compete with other popular forms of audio entertainment, such as iPods and other portable media devices, as well as terrestrial radio.
The coming months could prove interesting for XM and Sirius as the providers lobby for DOJ and FCC approval with support from various organizations, while the heavyweight NAB collects the opposing view of others to further its case.
This article is over a month old, voting and posting comments is disabled
9/20/2007 8:02:48 PM
Perhaps, but DBS satellite was the same way. DirecTV and Dish didn't start making a profit until they had subscriber numbers in the high millions.
Both companies are pretty solid these days. The only question is if a single foot-print in the market will contain enough users to cross the threshold.
On the bright side their content costs should be much cheaper. Sports like the NFL, NASCAR, MLB, won't be able to get them to out-bid each other.
In general, I think they should be okay, but they are probably 4+ years off from being cash-flow positive it they go-it-alone. Given the fact we're going into a tighter credit market, this might be disastrous to one or both of them. I also believe they will have little reason to raise rates, other than to test out the logical equilibrium point. I personally have no problem with monopolies. More power to them. If the market turns out to be a cash cow, then someone else will come along.
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
XM and Sirius Propose New à la Carte Plans
July 24, 2007, 5:00 PM
Sirius and XM Merger Still Under Fire
March 6, 2007, 12:00 AM
Sirius and XM to Merge in $13 Billion Deal
February 19, 2007, 4:07 PM
FCC Says No to Sirius and XM Satellite Radio Merger
January 23, 2007, 1:42 PM
Latest By Levi Beckerson
Of Turbines Large And Small
May 24, 2011, 9:07 AM
Various Alcohols Shown To Make Various Improvements on Specific Superconductor
January 11, 2011, 8:32 AM
Genetics and Taste Buds; Can Science Build Better Chocolate?
December 27, 2010, 9:01 AM
New UMass Technique Seeks to Replace Petroleum for Industrial Chemicals
November 26, 2010, 7:26 AM
New MIT Nanotech Fights Cancer Naturally
September 20, 2010, 8:30 AM
Genetic Modification Turns Killers Into Saviors
September 16, 2010, 1:13 PM
New Rensselaer Nanocomposite Kills Staph
August 17, 2010, 8:10 AM
Researchers Create Nanoscale Particles For Ultrasound Applications
August 16, 2010, 3:44 PM
NCSU Study To Help Understand Nanoparticles Inside the Body
August 16, 2010, 8:38 AM
New Lithium Metal Phosphate Batteries Made With Wax and Soap
August 13, 2010, 1:10 PM
Quick Note: Apple Watch to Get Brick and Mortar Boost From Best Buy
July 27, 2015, 3:00 PM
Can HTC Save Its "RE Grip" Smartband After Its Inexplicable Failure Launch?
July 17, 2015, 2:29 PM
Facebook's "Moneypenny" is Cross Platform Siri on Steroids
July 15, 2015, 3:59 PM
Apple Watch Sales Have Plummeted
July 8, 2015, 5:01 PM
Consumer Reports: Galaxy S6 and iPhone 6 Can't Keep Up w/ Galaxy S5
July 6, 2015, 4:57 PM
Apple iOS 8.4 Rolls Out w/ Fix to Crash-Causing Unicode Text
June 30, 2015, 3:24 PM
Most Popular Articles
Microsoft July 29 Windows 10 Launch: Freebies, Rollout, and What's Next
July 21, 2015, 2:40 PM
As iPad Sales Wane and Watch Flops, iPhone Saves Apple's Profit With Its Heroics
July 22, 2015, 6:13 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Mozilla and Facebook to Adobe: It's Time to Kill Flash
July 20, 2015, 6:30 PM
Google Scores Bizarre Court Win as Disgruntled Android Users' Lawyers Ruin Case
July 16, 2015, 5:58 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information