Sirius and XM to merge - wonder what the impact will be?

[Trouthead]

If this happens it will be great. XM Nascar fans lost coverage of races to Sirius. NFL is only on Sirius, while MLB is only on XM. If you are a sport fan, you really need two subscriptions and two sets of hardware. This hardly does the consumer any good. I can't imagine that the cost of a subscription to the merged XM/Sirius will much more than one subscription to either.

All the talk of anti trust and lack of compatition with one provider is really non sense. Right now you have a choice to make that either way is wrong. I like all of the sports and I can't listen to all of them on XM.

The hardware situation will be dealt with. They cannot just screw over half off the subscribers, and make them upgrade their hardware.

 

[HDTVFanAtic]

Looks to me it will definately pass. What's better for the consumer - one of the two folds, leaving their customers with useless equipment/accessories, and leaving a remaining still weak provider? Or, a merged much stronger company that can offer innovative things, and compete with their real competition - MP3 players and terrestrial radio?

And all the talk about the concern of regulating prices becasue it will now be one provider makes no sense. They cannot price themselves out of the market because regular radio is free, and the use of MP3 players, CD'S, etc.. prohibits an unrealistic subscriber cost.

If one "folds" as you say, it would be picked up in Bankruptcy Court. I already know of someone that has the financing in place for either one at $1.5B with a B that would purchase it before it got to that point.

Remember, if they go Chapter 11, all the existing debt can be removed (or re-negotiated) - which is about the only way it appears these flying turkeys can make money now.

Just like Iridium, which of course XM and SIRI kept swearing they were not like in the beginning, when you spend $6B on the system and it sells for $25M in Bankruptcy, then its pretty hard not to make a profit.


NOW, for how would it effect D* and E*, technically Sirius is buying XM, so the Sirius contract for audio would most likely stay in place.

But then again, Sirius and XM have a better chance at breaking a profit next year then this passing (and they will loose a combined $1.7 Billion this year even with a combined revenue of $1.6Billion).

 

[BobMurdoch]

The deal is my XM shares get swapped for Sirius shares, so Sirius is the bigger fish.....

Is my SkyFi2 an endangered species?

 

[Peter Parker]

Neither company is buying the other. The Sirius name (corporate) will survive but we have no idea just yet which technology will prevail. i would hesitateif I were consideringa purcahse right now but existing subs should just sit back and wait.

 

[Peter Parker]

The NAB came down hard on Charlie and the proposed D*/E* merger..It had nothing to do with Satellite market share of pay tv...BTW the cable lobby was opposed to the merger as well.....Look, the feds allowed MA Bell to be reincarnated with the Bell South/At&T merger so why not sat radio...Look at all the huge banks that merged when interstate banking wa made legal....and the Airlines..Heck in 20 years there will be three to five major carriers and a whole bunch of little regional carriers....US Airways/America West already merged to create the 3rd largest carrier, NW will merge with Delta or United, Continental will merge with whichever major carrier is left..And that 's that....So there will be less competition....But that's banks telephone and air travel..Things that are tough to get along without....Satellite radio?..It's still a luxury item....I don't think the feds wilk look at this one too hard....

The NAB has laready announced that they are against this as well---and I never said that the rejection of the D*/E* deal had anything to do with market share. I simply said that in that case it was argued that cable was the competitor---just as another poster was saying that terrestrial rdio is the competitor here. . I don't know what the FCC, SEC or DoJ will do. But they tend to oppose mergers of this type.

 

[Peter Parker]

The difference here is everywhere in the US you can get radio signals, that was not the same for getting cable tv or satellite. In some places satellite is the only way you can get cable type channels.

With satellite radio its not considered a lifeline service but more of a luxery, so it COULD pass. Will it pass I dont know. And at the mooment I don't have an opinion eaither way.

I got to give Sirius credit they keep pushing ahead of XM while XM keeps getting more and more stale each month, which is sad since I was such a huge XM fan in the past.

Again I am not makinga prediction one way or the other. But the argument against consolidation exists whether the product isa necessity or a luxury. And all the arguments about "Cable type channels" would apply to satellite radio.

I am an XM sub and prefer it but I too give Sirius a lot of credit. That is a lot of sub growth in a short time. Few thought they could do it but they did.

 

[kstuart]

Neither company is buying the other. The Sirius name (corporate) will survive but we have no idea just yet which technology will prevail. i would hesitateif I were consideringa purcahse right now but existing subs should just sit back and wait.

They have intentionally not stated what the new name will be.
Personally, I think that "Sirius XM Radio" is still quite short and preserves the name recognition of both entities.
I do think that they must pledge free equipment swaps to the new system, otherwise the sales will die to near zero in 2007...

 

[Peter Parker]

Good point Kstuart but the surviving entity is SIRIUS. It might adopt the XM name eitherasa corporation or as a trade name. . But it still is not a Sirius purchase of XM. But thanks for the correction. My statement was not correct.

 

[kstuart]

If this happens it will be bad in all kind of ways meaning you will probebly have to upgrade your equipment.My boombox,skyfi 2 and car connections probebly won't work anymore.Also the price will probebly double and a lot of music channels will get axed.

Just the opposite in all cases.
As I just mentioned, they will have to provide free equivalent swaps - similar to the way that buying Windows XP in December came with a free Vista upgrade - otherwise no one will buy either system in 2007.
The price will not increase - because the competition is Ipods, Cell Phones, and HD Radio - and you will get more channels - the combined system has twice the capacity of XM alone.
UPDATE: according to cnbc.com :

But Karmazin and Parsons said in an interview that the companies are working on developing a receiver that could receive both signals.

So - like Dish 300's pointed at 119 - they will likely keep both systems running in the near future so that customers can continue to use "legacy" equipment.

 

[Peter Parker]

Folds? Have you seen the stock prices recently? Unless there is a danger of another Enron or Adelphia, there is no way either company folds.

I don't know how imminent a fold is or was but both services took quite a dive in share price over 2006. theya re up today but the one year trend was not so good.

 

[dishcomm]

Depends on where you live we have Sirius here in Atlanta because broadcast radio has become so bad, we now have 14-16 Spanish stations, 6 urban/rap stations, 2 top 40 (heavy on the rap), 4 country stations, 1 AC, 1 Hard rock, 1 alternative & 1 classic hits (300 song juke box w/no dj's. So if you like oldies or classic rock you are sol. My wife likes top 40 but has stopped listening to the broadcast station most of the time because they have really started pushing the rap crap. It is almost as if the radio companies just gave up. I hope they don't merge, I have had both and I like Sirius better but even if the prices go up I will keep it (to a point) if it gets to expensive we will have to go back to cd's (which can get expensive as well). So technically we have choices but none that we want its like having a choice between chocolate and vegimite...if your starving you will eat the vegimite but you wont enjoy it.

I quit listening to FM music stations long time ago...I like classic rcok and even though there are three stations I can tune tother's no use...One staion is an "independent"..The staion is owned by a small company thta has a few more ..The station does not use traditional market research to decide their playlists..There ar eno dopey DJ's, no idotic AM drive shows, no silly contests..Just music...In fact the only voice one hears is thta of the staion owner who cut voice overs to promote the station....SO I listen once in a while...But mainly I listen to AM talk and AM all sports...ANd siince I am politically conservative talk radio suits me just fine..Todays FM radio is a load of crap..The same songs played evbery day at roughly the same hour..DJ's that have nothing ot do but talk for 45 seconds per hour..Dj's have no say in what gets played..They are instructed that in order ot keep their jobs to not EVER deviate form the playlist..FM stations do not want personalities spinning CD's.....Anyway, they can all go to hell..FM radio is dead....BTW there are a plethora of top 40 (hip hop heavy) urban contemporary(All hip -hop/gansta rap) a couple of pretty good adult contemporary stations that play 70's 80's and early 90's stuff ..No metal or other hard stuff..Not bad..
Tell ya what...NYC is THE WORST market for classic rock..Of all 787,000 radio stations in the area, there is like one classic rock station....In fact when I lived there I was fortunate enough to be able to pick up stations from outside the city...So I had 4 classic rock stations I could listen to...But the city itself, there were like three,,Now two are not even playing music anymore..WNEW FM was a classic rock pioneer.WXRK where Howard Stern's career really took off is no lonegr playing music either.,.....WNEW-FM started playing album cuts when the others still had hokey DJ's spinning 45's and talking over the lyrics!!!WNEW is now a talk station..Unreal.I am going to sit on the sidelines on Sat radio for now...I want to see where this merger thing is going to go...BTW It comes as no surprise that ATlanta has no rock stations...look at the demographics of the city..It's what, 60% black? Station owners know who the predominant audience is...