The Department of Justice has approved a merger between SIRIUS Satellite Radio and rival XM, over one year after it was first announced. The move has been hotly contested, with the companies arguing their merger would benefit consumers and not create a monopoly (the argument being that consumers aren’t choosing between two satellite radio providers, but rather between terrestrial radio, iPod, etc when looking for music and entertainment choices). Both Sirius and XM have promised a number of benefits to their customers should the merger happen – a la carte service, a variety of channels, etc.
But don’t expect to be tuning into a wonderland of XM-Sirius goodness any time soon though, as the FCC still needs to sign off before this is final – and they’ve been the slowest decision makers of all. Hopefully this won’t drag out for another year, but with the National Association of Broadcasters still fighting valiantly against the merger, who knows…
If you’re the type who likes to read big words, here’s what the D to the O to the J had to say:
After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers. The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers.
You can read the Department’s official release and analysis here.
Tags: Satellite Radio, Sirius, XM
I honestly think if this happens it could seriously (pun sorta intended) mean the end of terrestrial radio as we know it. And frankly, what I hope it does is force these terrestrial stations to be creative again.
i disagree. it’s like cable. it might be better content than free TV, but american idol still gets way more viewers than the sopranos. terrestrial radio isn’t cool, but it’s not going anywhere. what’s going to put a dent in both of them is when you can easily and cheaply get internet radio in your car…
Bram is absolutely right. Go talk to any of your parents’ friends. They don’t even know how satellite radio works, how cool it is or how easy it is to install. And they’ll probably never find out, because they are content with the background noise they get for their 30 minutes of driving each day. Satellite remains a place for people who demand better quality entertainment. It’s an amazing medium, but it will likely always be a niche, albeit a large one. It will continue to grow but could never possibly replace anything.
Ummm they said the same thing when cable started. “why would someone pay for tv when they can get it for free?”. Now cable is in more than 90% of American households. Parents and their friends are never the target demo for new technology. Frankly because of the exact reasons you just stated.
To take it even further, they said the same thing about bottled water, about watching movies at home, and about having phones in people’s cars, then about everyone carrying a cell phone, and about computers being on every student’s desktop.
Bottom line, if it’s marketed correctly and done right, eventually it will become a nessesity to people then become the norm to the generation after that. Think about how many teens today are completely foreign to the concept of buying a cd vs those in their mid twenties who bought them growing up? It took less than a generation for technology to completely change the landscape.
And looking at this along with the other new forms of entertainment in cars, like internet in cars or HD radio. It seems terrestrial radio has more to worry about than ever. Hence the reason the NAB is/has been fighting so hard keep this merger from happening in the first place.
Actually Matt, only about 58.4% of all American homes subscribe to basic cable television services. And as Bram said, it still hasn’t replaced over the air broadcasts. Network broadcasts still gain massively larger audiences than any cable-only program. And we’re talking about TV – something people spend 2-6 hours a day watching. Radio, for the most part, is limited to car use and can be seen as a secondary concern when thinking about where to spend your discretionary income on entertainment.
I love my Sirius and think it’s a fantastic service that makes fans every day. It won’t go away, but the sweeping fanboy “terrestrial is shaking in their boots” argument is just silly. The argument here is not “satellite radio will fail because of x”, the argument is “satellite radio should continue to grow, but will never ‘destroy’ or ‘replace’ all of terrestrial, no matter how lame and tired the latter gets.”
I just googled the stats – 59.1 % of all US houses have cable and 25% have satellite. Accounting for to nearly 85% of all homes. Yes network TV exists but people are getting it largely through means other than over the air radio broadcasts. It’s coming to them through a cable or via satellite.
It’s only a matter of time before Satellite radio and it’s national platform becomes more appealing to advertisters/programmers wanting to hit that audience. The programming may be created by Networks but will be disemminated through a national means.
And I wouldn’t say “the end of terrestrial radio as we know it” is a sweeping fanboy statement. It’s more a statement that things are changing at the radio landscape and terrestrial radio will probably have to do as well to compete.
But if more and more satellite radios are put in new cars (like they have been), it’s only a matter of time before it becomes the standard in vehicles as well. And saying that radio is just limited to car use has already been proven false by new technologies like the people meter. Which already has many terrestrial programmers re-think their weekend and nighttime programming strategies.
Bottom line, change is good and probably terrestrial radio’s biggest fear yet their biggest challenge.