DoJ Finally Realizes Sirius/XM Radio Merger Isn't a Threat

Finally, more than a year after the deal was first announced, the Department of Justice approved the merger of Sirius Satellite Radio and XM Satellite Radio. This deal took longer to review than Google’s DoubleClick acquisition. And it is not over yet. The FCC still has to put its stamp of approval on the paperwork. Washington really needs to speed up the merger-review process. Deal, or no deal: it should take no more than six months tops for Washington regulators to render their verdict on an acquisition.

If this merger does go through, as it should, what will the result be? A struggling company with a combined $2 billion in 2007 revenues, $1.25 billion in combined net losses, 17 million total subscribers, and more than 1,500 employees (there’s your costs savings right there). The logic of the deal has always been about reaching critical mass. Satellite-based businesses have huge sunk costs and they need to reach a massive number of paying customers in order to compete.

Will this be enough? Satellite radio is a superior product to terrestrial radio, but it still faces two main challenges: it is not free, and you really only need it in your car. With the increasing diversity of music choices on the Web (both legal and not) and the ubiquity of iPods, terrestrial radio is the least of Sirius/XM’s worries. Maybe Apple should just buy the combined entity and put it out of its misery. I’ve always thought that an iPod/XM radio would be a killer product.

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Comments

[stinkaroo:]

What bothers me about this article is his seemingly lack of knowlege of the products the Satelite company offers. I personally have a Sirius Stiletto and I use it in my car, my home, when working out, lounging on the porch, fishing, yardwork, etc... His mention of an iPod/XM radio suggests that this great idea for a product is sitting out there waiting to be discovered when in fact, both companies offer a very similar product. The Stiletto allows you to record satellite content, mp3s and wav files from your computer and it has Wifi connectivity that automatically streams Sirius content when connected to an access point. I guess everyone is going to be submitting their 2cents now that the merger is at hand, I just hope that some of them know what they are talking about when they discuss the content AND product that the companies offer.

2008 Mar 25 08:48 AM

[DoctorBob:]

Besides the car, the other location that satellite radio really comes in handy is anytime you're outside a major city. The ability to have your favorite genre of music, talk, or sports instantly available when you're "in the woods" goes a long way in making that 13 bucks seem like a no-brainer.

2008 Apr 16 10:04 PM

[Dauntless:]

Doctor Bob,

Tell all your friends to send a msg to [e-mail]

A nice mwould be "If you are sick at home for 2 months now, send in the dog to make a decision!!"

I'll take 2 tumms now and call you in the morning.

Dauntless


On Apr 16 10:04 PM DoctorBob wrote:

> Besides the car, the other location that satellite radio really comes
> in handy is anytime you're outside a major city. The ability to have
> your favorite genre of music, talk, or sports instantly available
> when you're "in the woods" goes a long way in making that 13 bucks
> seem like a no-brainer.

2008 Apr 20 04:41 PM