XMSR and Sirius: Bigger Problems Than FCC Approval

So there was a pretty interesting Q&A exchange that appeared on TickerHound this week.

A member asked, “If Sirius (SIRI) and XM (XMSR) get approval from the FCC is it time to buy?” – click here to read the entire question.

One of the members was leaning towards the Bearish side of the argument…and he makes a good point:

Think about it - iPod docks come in most cars now, iPods are outselling satellite radios by orders of magnitude and with the proliferation of pod casting, the “talk show/news” aspect of radio is rapidly becoming commoditized.

This got me thinking – how has satellite been doing relative to HD radio and the iPod?

Where will this industry end up?

Many opponents of the XM/Sirius merger argued that the union of these two companies would create a virtual monopoly in the satellite radio industry. But what XM and Sirius argued – and ultimately, what the Department of Justice agreed with this week – was that the battle they’re fighting isn’t with other potential satellite rivals, it’s with everybody else in the personal audio market, namely Apple and traditional broadcast radio.

And I have to admit, I personally don’t listen to the radio in my car anymore. I plug my iPod in and I have my own personalized radio station for an hour. I know plenty of other folks who can’t stomach the thought of paying to listen to the radio in their car either – even if it is for Howard Stern. They’ll simply tune into the regular radio stations.

It’s pretty clear that the alternatives are compelling and that’s why I think it made a lot of sense for the DOJ to approve this merger – and ultimately I think it’ll pass the FCC as well. There’s a lot of competition in this game and the prize is certainly a big one.

So let’s take a quick look at the battlefield and break it down by the numbers:

XM Satellite Radio

Subscribers: 9 million
Revenue: $1.14 billion

Sirius Satellite Radio

Subscribers: 8.3 million
Revenue: $922.1 million

Together these companies will have roughly 17 million subscribers (have to assume very little overlap here).

Broadcast & HD Radio

While it’s still the clear leader in terms of market penetration, traditional broadcast radio has been plagued by sluggish advertising revenues for the last few years. If this industry has any hope of surviving, its future lies in Digital/HD radio.

iBiquity, the company that invented and sells HD radio technology, is privately held so accessing credible data is difficult. My best guesstimates are below:

HD Radios sold (FY: 2007): 330,000
Revenue ($180 per unit): $59.4 million

Apple iPod

I’ve bought roughly 3 iPods over the last few years, so it would be unfair to use the number of total iPods ever sold as an accurate comparison to XM/Sirius. To be conservative I’ll just use Apple’s Fiscal 2007 numbers instead.

iPods sold (FY: 2007): 51.6 million units
Revenue (FY: 2007): $8.3 billion

Who’s Gunning For Who?

HD Radios certainly seem like the next logical evolution in the automotive market – people are used to it, more and more radio stations are getting equipped with HD broadcasting technology and the price of the units is bound to come down as manufacturing processes and component costs fall.

But will that deter the growth of satellite or the iPod as a compelling alternative?

HD radio sounds good in theory, but you still can’t fit it into your pocket and carry it to the gym with you. With satellite radio and the iPod, you can take your music with you wherever you decide to go – with HD radio, you’re still stuck in your car.

And while satellite is certainly growing, it’s far from profitable and it still lacks the penetration rate of the iPod.

Furthermore, Apple is making a concerted effort to penetrate the auto market – the only big car manufacturer that doesn’t have an iPod option is Toyota and I don’t see that lasting much longer. In any case, with all of the after-market options available, anybody can bring their iPod into their car with ease these days.

This is a direct challenge to both broadcast AND satellite radio, and based on the numbers, Apple’s definitely leading the pack for the moment.

So even if the FCC gives this merger its blessing, I think XM/Sirius have bigger problems ahead.

Disclosure: None

Comments

[User 168827:]

some of your points are good but i for one think carrying around an I pod takes a lot of effort and i for one would not like that. I guess you could leave it in the car. When you compare the cost of the I pod and the cost per song is it really cheaper than sat radio? I don't think so especially if you bought 3 already. I agree that sat radio has its work cut out for them to be profitable as there is so much competition out there that it is not funny. I for one would love to see every radio manufacturer put a hard drive into their radio so that you could load all your music directly into the radio. Eventually we will see streaming music directly into a car radio via the cell towers. At that time sat radio will most likely be done.

2008 Mar 27 08:36 AM

[163888:]

Your an idoit if you believe the Ipod competes with satellite radio any more then cd players do with radio. I have never been under the contention that the ipod is a substatute for satellite radio even when arguing for the merger. Content is and will always be king. On top of that the ipod is more expensive. At a dollar a song it cost most at least 200 dollars to fill their ipod, and how many people do you think keep those songs for more then a year.

2008 Mar 27 08:37 AM

[ace22:]

Can you listen to football or baseball games on your Ipod?
Or discover new music you like that you never knew exsisted?
Or talk radio stasions like howard stern or the news or weather?
Didnt think so

2008 Mar 27 08:41 AM

[htroute66:]

One huge factor you chose not to mention about HD Radio is the fact that as you travel you have to find a new staion every 25 to 50 miles......and in a LARGE part of this country you can't even find a radio station on the dial! As far as IPODS go I know a lot of people who don't care to spend their time downloading when they can just get in their car or truck and find any kind of entertainment they want. Very many people don't even listen to music..... they prefer news or talk shows. Find that on you IPODS!

2008 Mar 27 08:44 AM

[BackStJoe:]

Content is king. I love my MP3 player. It's a lifesaver on the trains. But when I'm at home or at work all I listen to is Sirius. Not only is it amazing to have an uncensored Howard Stern, the commercial free music is unbelievable. There is so much variety, and all you do is turn it on. Programing you're MP3 player, from ripping or downloading, making play-lists, and if your a perfectionist like me, remastering the old music to sonically match newer music, you're talking a lot of time! Sirius is a no-brainer.

2008 Mar 27 08:56 AM

[spr0949:]

Wayne, if all one is interested in is "canned" programs then the ipod would be fine. If fact, we wouldn't even need terrestrial radio. The advantage of satellite radio is the ability to listen to the same program while traveling from state to state, covering a large area. I find it very frustrating to be listening to a program that has caught my interest, only to have it fade out as I travel, and be unable to find it on another station. In fact, there are some areas where I travel that all I can pick up is religious stations or bluegrass music stations when I really want to listen to an interactive talk program. It is all about choice. When Sirius and XM are combined I will purchase a satellite radio, and with their proposed ala-carte pricing this becomes even more attractive. Contrary to what I have seen some uninformed writers claim, these combined companies will be able to stream their programming on either type (Sirius/XM) radio or on both, on whatever channels they choose, and a radio that is able to pick up both is very possible, although not likely to be needed for long. The merger is a very good move for consumers, and because of competition from other audio venues, their prices will always have to remain competitive. Those who oppose the merger either have their own agenda or don't understand the technology. I for one, rarely listen to music and would have no use for an ipod, preferring instead to listen to investment advice programming or political talk programming.

2008 Mar 27 09:05 AM

[User 168827:]

i agree with SPR above, I believe there is enough free channels on each provider that ala cart programming can be done immediately.

2008 Mar 27 09:27 AM

[The Sim:]

The main reason most people have so much music or Howard Stern broadcasts on their iPods is because they have downloaded it illegally for free via file-sharing networks. So what does that say about our society? I don't know anyone who actually bought an iPod just so they could download free podcasts. Someone who actually pays up to buy enough content to fill an iPod with constantly updated music will quickly find it's no longer quite the same value proposition vs. a monthly satellite radio subscription with virtually any genre of music / talk / sports / etc. you could want on tap at any time.

2008 Mar 27 10:10 AM

[Meedl:]

I have XM in both vehicles and listen to Sirius at home. I listen to my Ipod when I walk and only when I walk. I would never give up my satelite radio when I travel. I love being able to listen to my choice of sports teams no matter what town I am in, I can listen to news no matter when it is and if I change my mind what I want to listen to I don't always have time to go change what is on my Ipod, but I can change the music on my XM or Sirius...

2008 Mar 27 10:12 AM

[whttiger25:]

You really neglect to take content into account in your analysis. My ipod is great and I listen to it in the car all the time, but it has music I already know about, and lacks in many genres. What if I am in the mood for some jazz? Just go to 1 of 4 different jazz stations. No commericials....any genre is represented commercial free. What's more, many of the TV news stations I watch are on there, like CNBC, CNN, Fox news....You have sports, NFL and/or Baseball, nascar, NBA....all kinds of talk radio including Howard Stern. Content is king, and you have to pay $1 for each song on your iPod. You can pay $13 a month and get unlimited songs you may or may not have heard, in any genre you want.

I feel like it is politically correct to hate these companies. All mainstream media continually trashes this merger. Do you (the media) really hate the merger or are you in bed with the NAB, which is just scared?

2008 Mar 27 10:13 AM

[The Sim:]

The big winner in all of this is Mel Karmazin (and SIRI stockholders) -- even if the merger is ultimately prohibited by the FCC, in the long run he has pretty much killed XM. It will continue to wither away, and SIRI will emerge as the ultimate leader in the field. It will just take much more time and money than if the merger goes through (on QUITE attractive terms to XMSR shareholders, btw). It is obvious the merger must be approved quickly by the FCC, for the good of the marketplace.

2008 Mar 27 10:14 AM

[Billy C:]

Here is what these so called expert analysts are missing. Do you really think that satellite radio is going to rest on t's haunches and get swallowed up by other technologies??? Do you not think that as we speak both Sirius and XM are not working on new and innovative technologies that will create new excitement in the marketplace. Do you not think that major companies would invest and continue to invest in satellite radio if they thought all this would go away. Be real! These are some of the greatest business minds in our country. Anyone with an ounce of brains can see the major investment that has been made thus far and with the involement of some of the biggest celebreties,sports leagues, and car manufacturers in the world, this is just not going to go away.

Satellites in place can do far more than just broadcast radio. Think about the GPS capabilities. Why literally they could start placing chips in human beings so as to track kidnappings, homicides and runaways. It is staggering what the potential of all this could provide. Do yourself a favor and do not listen to these smucks who are so called expert analysts. They all have a hidden agenda. All you have to do is apply common sense.

2008 Mar 27 10:19 AM

[User 137765:]

The DOJ did it's best to stall the merger proccess. It took them over a year to come to a conclusion that the majority of shareholders and subscribers to satelite radio had realized withing weeks of the proposal. Now the FCC will have it's turn to either push it through so some value can be salvaged or it can drag it's feet and watch both companies drown in debt. I believe there will be a significant surge in subscriptions once the merger is finalized. Hopefully Jim Cramer will get on his bully pulpit and put some pressure on the FCC to get moving.

2008 Mar 27 10:47 AM

[Some Guy:]

Wayne, podcasting and all other recorded forms of audio are well and fine, but as a busy professional I have little time or interest to: a) spend a good couple of hours perusing iTunes or another site to browse and find what I like b) download and manage this content and c) repeat once I have had a chance to listen to my selections and refine my tastes.

Satellite radio allows me to explore my general music and information tastes and save what I like for future consumption (using a device like XM's SkyFi3) and also bring in other offline content. This combination is perfect for me as it allows me to blend the use of recorded audio (including mp3s and podcasts) along with a chance to find new and interesting content. It's not perfect (eg. have to still go download mp3s after I've recorded content on my XM device if I want high quality audio for the computer and elsewhere), but for me it's a lot better than the alternatives.

For me, ideally devices/technology like Slacker will take off and free me from ever having to search for content once I've determined what I like, and will also allow me to explore for new content when I feel like it. While satellitle technology may or may not be able to meet those needs, I think they are a good entrant to have and look forward to synergies from the merged company.

2008 Mar 27 10:55 AM

[spr0949:]

I was not trying to trash ipods, and no, I don't have an ipod. They serve a need just as terrestrial radio and satellite radio do, but in a different way. We have so very many choices that there is absolutely no way that the merger could be considered to be creating a monopoly. It is very expensive to put up the satellites and maintain the infrastructure to support satellite radio. With terrestrial radio, if one station fails the industry will continue unscathed. With satellite radio, if one part fails it is likely that the service would be affected across the board. One strong satellite radio company is better for all of us than two weak companies. Their existence provides added impetus for the NAB members to provide better service, for us, the consumer. They don't want the pressure to force them to excel. They would rather maintain their monopoly, and tell us what we can and cannot listen to.

2008 Mar 27 11:00 AM

[Joe F.:]

You are too funny. I guess I should get rid of my cable then and just play all the DVD's I have over and over again because that's all I should care about viewing. It's about content, it's about new choice and alternatives, it's about commercial free, it's about "live", it's about so much more than just listeining to recorded music.

This is a robust audio experience that you can subscribe to and take anywhere. HD radio is just FM with all the commercials being broadcast digitally. It is not, and never will be, any kind of competition.

Oh and did I mention that this technology can be licensed worldwide.
No, I guess I didn't. Did I mention that it can stream video as well.

OOppps, must have forgot that too.

Did I also mention that adding a download service on a netflicks type basis is also the next step. What's that you say, I can have an "itunes like service" AND Sat Rad - all on one platform and for one wrap in price!

OOpps, must have forgot that possibility too.

The next leg of growth is just starting my friend and the financial markets will tune into it over the coming months as they also tune into the massive free cash flow.

Keep deriding and denegrating it at your own peril and I'll have fun watching your personal financial car wreck.

End of story. Time to flush you Mr. Mulligan. Come back after you go to school.

2008 Mar 27 11:18 AM

[Wayne Mulli...:]

@Porcelain Altar - you make some good points, no doubt...and I'm not totally writing off satellite radio.

The thing to keep in mind however is that with a distribution channel already locked down (having 53 million+ iPods in people's hands) gives Apple a HUGE competitive advantage. Now let's throw in wireless connectivity (as we're seeing with the iPhone), the falling prices for storage, bandwidth, etc. and you could have the equivalent of radio-on-demand coming to your iPod whenever, wherever.

Your arguments are certainly valid, but for all you know about the coming technical innovations in satellite radio, you're certainly ignorant of the existing technologies available on the web and mobile devices.

-Wayne

P.S. After I go to school? Damn, I knew I forgot to do something :)

2008 Mar 27 11:30 AM

[scuba:]

I still don't see how iPods are competition to sat. radio. I hop in my car, turn on my Sirius and I can hear new music on my way to work. How exactly am I getting exposed to new music from my iPod? That's right. I need to sit down in front of my computer and browse songs at itunes or endure endless commercials on free radio.

XM and Sirius know that most customers would have a hard time giving up sat. radio and without direct competition they will be able to push the price of radios and establish complex tiered programing designed to get just a little more money out of each customer. This is a bad idea for consumers.

2008 Mar 27 12:05 PM

[Joe F.:]

Wayne, what is that wireless conectivity, no, suppossed wireless connectivity, going to cost, who is going populate it, how will they pay to populate it and what will the royalty arrangements be?

Or is it just going to be FM radio stations being broadcast via wifi?
If that's the case how is it different from FM? Is this suppossed "radio on demand" you speak of going to be free?
Of course it won't be, unless it is advertiser sponsored, and then it's just going to be FM all over again. And if it is advertiser supported how will they keep track of who downloads what and is listening to what in order to set ad rates properly.
There are too many holes in your argument regarding Apples ability to get into radio. Wifi could maybe replace satellite technology in about a decade, but by that time satellite technology will have leapfrogged wifi - probably twice.

It is satellite that has the advantage because getting the content, royalties and distribution is what they have NOW. That is not so easy to duplicate as your rhetoric makes it seem.

It is apple who will be disadvantaged by satellite, and not the other way around. Watch satellite show up with a platform on the desktop, probably as an OEM. Then watch them offer an unbelievable amount or pricing options.

Like this - I can get my 63 music stations, Howard Stern and 10 downloads of my choice each month for $25.00

Or may be I just want the 63 music stations for $6.99.

There will be plans all over the place that will combine recorded music with radio. The sat radios in cars will eventually become not only tuners, but players of your recorded library, just like an ipod.

On top of that, 3 years out, they will combine that with GPS.
Wifi can't compete with the robust nature of Satellite.

And Slacker and Pandora are already in royalty fights and now need to grab more advertising. By their own admission they are at a huge hump in the road.

Great content simply isn't going to be available for free anywhere.
So who has the infrastructure set up to best deal with this going forward. Sat Rad does.

I know you can't see this and that's OK. Alot of people can't.
And a lot of people are biased, have an agenda and are unable to objectively view the technologies, adequately compare them
and predict accurate forecasts regarding this wild, wild west.

That's all OK. But I've never understood anything more clearly.
And this is truly the opportunity of a lifetime.

No one needs FM broadcast to them in different ways. That is no improvement of the audio listening experience

2008 Mar 27 12:16 PM

[Wayne Mulli...:]

@porcelain altar - I guess we're just looking at it from different perspectives. I'm not arguing as to what the business models will be behind this - subscription vs. ad support or a combination of both - what I am saying is that by giving users more control, piggy backing existing distribution platforms and technology and the falling prices of everything from bandwidth to storage, Apple is in a better strategic position than sat rad.

We're seeing this in many industries, not just music - Amazon's kindle (while I think they should be discounting the price of the device and just making money off of the books they sell) is giving away the wireless internet access in order to increase book sales/downloads.

Only time will tell how this situation will play out, but I definitely respect the debate and arguments you put forth.

Do you have a blog or a site you publish on regularly?

-Wayne

2008 Mar 27 12:30 PM

[Mr.MRI:]

Well put Porcelain Alter & SPR!

...in the mean time, I will keep buying SIRI stock.

2008 Mar 27 12:42 PM

[vader:]

are you kidding!!!!!! i can be at work and now listen to baseball all day or i can listen to the race or howard stern or whatever i want to and it will be great i dont have to record anything and hope it got it DO NOT UNDER ESTIMATE THE POWER OF HOWARD AS WELL AS SPORTS i love RUSH but he fades in and out i WILL become a subscriber when this merge and details unvail

2008 Mar 27 12:43 PM

[GPHMoney:]

All media are competing for your attention. Satellite does compete with iPod or standard radio, etc... because it is competing for X% of your time. The iPod competes for dollars... if you use the iPod in your car, you are buying programming (and an iPod)... so satellite IS competing for your dollars... just as standard radio (through advertising) and iPod (through purchase of the device and accessories and programming).

Why the FCC took so long to approve this merger is the bigger question. Media and TV lobbied against it hard... with big dollars. Why? Does satellite compete with TV too? You bet it does now and more in the future... again, any media that takes time away from you being advertised to, or takes your money, will fight against the same.

This merger should have taken place months ago... instead, the FCC as usual took way too long to review due to lobbiests...aka lawyers for the big media companies. There is not enough room for two satellite companies to operate and be profitble... it's pretty clear... let them merge. If AT&T or Cox wants to get in that space, it would be pretty easy to enter...they own a majority of satellites already. What they are worried about is not entering the market, but giving the merged Sirius and XM Sat too much lead time ahead of them... why? First to market gains most market share.... usually

2008 Mar 27 01:25 PM

[GPHMoney:]

All media are competing for your attention. Satellite does compete with iPod or standard radio, etc... because it is competing for X% of your time. The iPod competes for dollars... if you use the iPod in your car, you are buying programming (and an iPod)... so satellite IS competing for your dollars... just as standard radio (through advertising) and iPod (through purchase of the device and accessories and programming).

Why the FCC took so long to approve this merger is the bigger question. Media and TV lobbied against it hard... with big dollars. Why? Does satellite compete with TV too? You bet it does now and more in the future... again, any media that takes time away from you being advertised to, or takes your money, will fight against the same.

This merger should have taken place months ago... instead, the FCC as usual took way too long to review due to lobbiests...aka lawyers for the big media companies. There is not enough room for two satellite companies to operate and be profitble... it's pretty clear... let them merge. If AT&T or Cox wants to get in that space, it would be pretty easy to enter...they own a majority of satellites already. What they are worried about is not entering the market, but giving the merged Sirius and XM Sat too much lead time ahead of them... why? First to market gains most market share.... usually

2008 Mar 27 01:26 PM

[ITS A SIRIU...:]

I have been and still am waiting for this merger to go through before I subscribe. I will subscribe so I can listen to baseball games, CNBC, and Stern while I am at work!! The critics are saying subscriptions are leveling off but how many of you are like me and are just waiting for the merger to be approved before jumping in!! I am betting my stock dollars there are millions of people waiting in the wings.

2008 Mar 27 01:36 PM

[motorcity:]

I wonder if among the new sirius receivers will be an ipod/zune like receiver that streams live content with satellite coverage and can download songs/content w/out being plugged in?
"g, I like that song, I think I'll click by now"

2008 Mar 27 01:39 PM

[User 169047:]

I have two sons driving, 16 and 17 years old. Both have iPods that rarely go anywhere without them. Both have iPod hook-ups in their cars and both wanted Sirius subscriptions for their cars.

When I asked my oldest son why he needed both, his answer was "that music on the iPod gets old and Alt Nation, ESPN and other stations on Sirius give him more variety." He said that " the iPod is great when he wants to listen to a particular song at that moment but he listens to the same list all day long."

So, just as satellite TV became a profitable venture with free TV, HDTV, Tivo, etc, there is no reason to belive that satellite radio will fail. We should learn from the past. Less talk, more music, more variety and consistency of stations no matter where you are traveling. Great deal for under $20 a month.

2008 Mar 27 01:45 PM

[The Sim:]

Wait until they start making ipods with builtin satellite receivers.... $$$

2008 Mar 27 01:58 PM

[spr0949:]

Note to GPHMoney.

Department of Justice approved the merger on Monday. The FCC is still trying to figure out how to satisfy their NAB masters and not lose face.

2008 Mar 27 02:00 PM

[connorport:]

i for one think this merger is essential for the survival of both companies. it allows both companies to absorb a huge amount of costs and reduce the cost of subscriptions and radios and volume sales will increase thus further reducing these costs. take a look at computers, as volume sales increase the price reduces further adding more volume sales. this merger is a good deal for both companies and the public.

2008 Mar 27 02:05 PM

[spr0949:]

It seems to me that Sirius/XM could claim defacto approval for the merger based upon the unrestricted approval from the DOJ and the failure of the FCC to act in a timely manner. After all, the FCC's own clock is 180 days, and that ran out 4 or 5 months ago.

2008 Mar 27 02:11 PM

[Serious Abo...:]

Ipod's are great but they don't offer live content like satellite radio does. You can't listen to any NFL / College Football, NBA Basketball, ML Baseball, NHL Hockey game, or NASCAR race. You have comedy channels and lots of talk shows. You have all of the major live news stations, weather, and traffic stations. You have the ability to stay on the same station on a trip across the United States. To top things off, Sirius is just now offering television in your automobiles. With Sirius launching new satellites this year you will get more televsion channels and be able to purchase content right from your radio, and Ipod's won't be able to do that unless you are in a wi-fi zone. So as I see it, satellite radio is a step ahead of everyone else. I foresee an offer in the near future from Microsoft (Zune), or Apple (Ipod), or maybe even Sony to purchase Sirius for their satellite capabilities.

2008 Mar 27 02:28 PM

[sat is king:]

Enough of the blah blah blah already! All forms of media are meshing together. The Stiletto already has iPod-like capabilities. Combine it with a phone and it will trump the iPod/iPhone in a heartbeat. Content is almost endless and uncensored. There is nothing els out there like Sirius/XM as far as ease of use, portability, content variety and technology. Just wait, Apple or Microsoft will be knocking on the door to buy in before you know it.

2008 Mar 27 03:11 PM

[xyz2099:]

Sat. Radio has current events ( weather, news, stocks, sports) that are only carried on radio. If I am traveling that is my contact with the world I can listen to without distraction from my driving. The next step for them is to offer a sat. video stream with all current cable channels available to non-drivers in the vehicle!

2008 Mar 27 03:21 PM

[User 169109:]

I don't have sat. radio, Ipod or HD radio. Just a car radio. Its fine for me. But, people buy it for one reason: content and maybe reception. Let me put up a provocative idea. After they get FCC approval, what prevents IPOD and IPHONE to offer sat. radio as a service along with ITUNES and other services? Swap spectrum to allow better access to Apple's other services. Seems like a no brainer and a very powerful growth vehicle. Don't count Mel out on this one.

2008 Mar 27 03:25 PM

[ace22:]

iTHINK APPLE SHOULD MAKE IPODS WITH A SAT. RECIEVER IN IT THAT WAY YOU COULD LISTEN TO SIRIUS ON YOU IPOD. APPLE AND SIRIUS SO MAKE SOME DEAL TOGETHER THAT WOULD BE $$$$

2008 Mar 27 03:29 PM

[sat is king:]

they already do----its called a Stiletto---without the $.99 per song !

2008 Mar 27 04:07 PM

[Irish Hammer:]

I'm a subscriber to Sirius and I couldn't be happier with the service. Which brings up a good point: customer retention is incredibly high for satellite radio, and it's because the content they serve is better. The reason why SIRI is better than the iPod in a car is because I don't have to choose the music myself - they create incredibly entertaining playlists for me, put together by experts in the field. Take Pat St. John, for example. I like the blues, but I don't know the first thing about the artists - I just like the way it sounds, occasionally. He is an expert, and puts together set lists that wrap into each other...it's a rich experience for the customer - and it's worth every penny.

Unlike a shotty device whose battery you can't replace, and explodes in people's pockets.

2008 Mar 27 04:08 PM

[Jerimiah:]

What I find funny is how all of the news stories about Satelite Radio are all negitive, but when you read the reader's comments they are mostly in favor of Sat Rad.

I owned a Zune (untill it was stolen) and subscribe to Sirius. I think I am more in favor of Sat Rad because, with my zune I had to search all over the internet to get good talk radio content, and all the free content i found was not very good. I had tons of music (over 25gigs) on my zune and thats all fine and dandy, but have you ever just gotten tired of listening to the same songs over and over for years. And when you get a new song you have to search for it on the player. And back to the begining, how did you hear about those songs in the first place. As for the wifi radio thing, I think that is not going to be as good as the writer of the article makes it out to be. If it works as good as my mobile internet card does, its not worth it.

As for the future of Sat Rad, it is now into video, and with all of the tv screens i am seeing in vehicles are an indication of how popular video will be in cars then I think they are on to something. All they need is to get Rush and they will be set.

Lets look

Ipod $200
Songs $1 each

Sat Rad Starts at $50
Songs are, well cheap


As for competing with our time, give someone an Ipod or Zune and give them a Sat Rad, Satelite Radio gets thier money weather they listen or not. The ipod requires people to actually sit down and pick thier musc for the day or week. who knows what kind of music I will want to hear all week, and I have two kids and one computer, I wonder whitch one will get my attention.

2008 Mar 27 06:05 PM

[Alexr78:]

Hey Mr. Wayne Mulligan Question. How many shares did you short before writing this article. <wink> I feel your article is more a personal preference then actual fact.

Thanks,
alexr78

2008 Mar 27 06:26 PM

[Roxieanne:]

All of these posters have articulated well the reasons for satellite radio via the merged companies.

Stockholders and the management of the two companies have been very patient throughout this approval process------more than patient.

What I would now like is for all of the 'talking heads' to not bash or pump the stock and let the stock seek its natural level based upon the financial facts.

If an analyst or company such as Goldman Sacs who recently downgraded Siri has a position in the merged company, it should be stated clearly what their interest is--------naked shorts, shorts, long, hedge funds that they represent or run----in other complete and full disclosure.

Siri, new company, should have a satellite channel dedicated to the new company----"All About Siri for Serious Investors"I

2008 Mar 27 07:43 PM

[connorport:]

i would like some feedback on this idea..my opinion is this..the only thing keeping Serius from controlling another half share of the Apple market is a TIVO version of satelite radio which to me seems easier to obtain than Apples ability to get into radio. My opinion is this is just what is around the corner. maybe i am off on this idea but i would not hesitate for a second to own one. maybe some radio and Apple exec's are affraid of this very thing that would no doubt give Serius a serious edge over both..

2008 Mar 27 08:19 PM

[Wayne Mulli...:]

@alexr78 - Full disclosure: I don't own, nor have a shorted, a single share in ANY of the companies mentioned in this article.

Saw a question come up on my site (tickerhound.com) and decided to weigh in on it. Maybe I'm right, maybe I'm wrong...what I REALLY enjoyed out of this whole process was the discussion that this article prompted.

For me, it's about engaging a community of intelligent people and hearing what they have to say. So, with 43 comments and counting, I can proudly say, mission accomplished!

I love sites like SeekingAlpha for this reason - it brings multiple opinions to the forefront and makes it all available for regular, retail investors.

And that's why I write these articles...that's why I run TickerHound.com...it's NOT to make money off of the stocks I discuss. It's to engage a community of intelligent people and hopefully help some folks make better decisions as a result of the debate/discussion that occurs.

2008 Mar 27 09:02 PM

[163888:]

Wayne the problem with WiFi is it is falling apart. Cities that were suppose to make it widely available are now and have been backing out. The reason is the cost, the companies (that were partnerd with the cities) were suppose to subsidize the remaining cost, have found it to be to expensive for the return. I also still feel if you really believe that the ipod competes with satellite you are an idiot. People switched from regular t.v. to cable because of content. Case in point Howard Stern was able to add at least 2.3 million subcribers to SIRI all by himself. Some may dispute that, the fact is Mel has said it, analyst have said it, and his bonuses were depended on it. You say that the iphone will compete but at what cost per minute. Just like the ipod is an expensive (at a dollar a song) way to go to get not even close to what you would get from a subcribtion with satellite, so is the iphone. My point here is why go with three different types of distribution forms that will cost more in the end then one that cost less. These forms at best will keep satellite radios subcribtion prices down. But that is already accomplished by free radio.

2008 Mar 28 01:24 AM

[Wayne Mulli...:]

163888 - Music is trending towards free...Apple came out with its own study showing 95% of content on someone's iPhone has NOT been paid for. This trend will continue and eventually we'll be left with either a) incredibly inexpensive music subscription services, or b) an ad supported model (this doesn't include the continued boot legging, which is what most folks do anyway - whether or not that's what they want to call it).

Never before - TV is a bad comparison - have we have access to such a vast amount of consumable content on our fingertips.

Forget WiFi - look at the Amazon Kindle: it uses the high-speed Edge network and it's FREE.

Me an idiot? Maybe, but definitely not for making a call like this :)

2008 Mar 28 07:42 AM

[Bob Wilson:]

Wayne:
I appreciate the thoughtful discussion. In the end, I think the variety of programming and convenience SIRI offers will make it competitive.
Whether its debt can be serviced is the real question, isn't it?

2008 Mar 28 09:26 AM

[phildar:]

My wife and I each have an ipod of our own. I have never though about getting a satellite radio until I took a trip with a friend who had one in his car. I try to listen to ESPN radio on a crappy AM station that constantly has static. I was able to listen to CNBC and multiple ESPN radio stations and even discovered what all the Howard Stern hype is about. His show is pretty good. I am with the others who have already commented on this article who will get a satellite radio for my car when the merger happens. I also own a small position in Sirius that I am holding for the merger catalyst.

2008 Mar 28 10:24 AM

[163888:]

Wayne, I will agree music downloads are getting cheaper, But think about nabster, it charges 12.95 a month for downloads, and all you get is music. Then you have to find someplace to get all the sports you may want, then your news, and talk, ect., ect., ect. Satellite offers a all in one package for one low price, on one device. My use of television was not a bad comparison, it was used to show why people switched to cable for content they could not get any where else. While satellite may compete with cable all the other crap such as net flex does not. Case in point most people have cable or satellite, they dont substitute it for netflex plus something else plus something else then not have cable or satellite. While they may use those other things they still have cable/satellite.

As a side note, I believe after a merger Mel will act as so as possible to make all the content he can that XMSR has, satellite accessible only (Opie and Andy). As a wise man once said "content is king". I also think if satellite in their wildess dreams could get Rush L. they would pay him 500 million and he would also be well worth it.

2008 Mar 28 12:21 PM

[SiriusBrit:]

In reading this article it becomes apparent that the writer ( who made no disclosure) is invested in Apple.
What he forgets is that most people download their own music onto their Ipods (not much revenue there for Apple) and if Ipods don't get cheaper soon then people (as usual) will look for a cheaper alternative, not to mention that as much as you like your own music, it still becomes old. Enter....Satellite Radio! not only is Sirius the 'fastest growing Company in the U.S' but the recurring and ever growing revenues (with an almost fixed overhead) will turn this company into one of the best Investments of this decade! The next time you are driving, take a look at the cars around you and see how many there are! now imagine the hundreds of millions of cars in the U.S All having Sirius installed as the standard production equipment! Now even if only 20% of the market sign up it would still mean a multi-billion dollar industry with huge profit margins! Finally, when compared to HD radio, all I can say is the difference between regular and HD radio is better sounding ads with the usual bland content (sorry, not worth the $200+ investment)which will quickly become apparent.
Never underestimate the value of content (content is King!) just look at Cable TV, some people pay $100+/ month......I rest my case for Sirius 'your honor'!

2008 Mar 28 09:50 PM

[Wayne Mulli...:]

I own Apple stock? I wish somebody told me ;)

2008 Mar 29 12:45 AM

[User 163772:]

I think you should take a mulligan and re-write this article after you perform some extensive research.

2008 Mar 29 07:08 PM

[Wayne is a god:]

Thanks Wayne! Im going to sell all of my siri and buy some HD Radio as soon as they go public. I was told the content is awesome!!

2008 Mar 29 07:57 PM

[otrpu:]

I drove OTR for a few years. Really enjoyed my XM & Serius sat radio. I had both radios and switched back and forth depending on the sports in season. Course I also had CB and NOAA weather going all day too. Hey people I'm a talking all day everyday 10 or 11 hrs. If it don't fit anywhere else it's got that niche far as I'm concerned. The industry screwed up DVD/BD by not giving us combo units. ANd the gov screws up everything it touches.

2008 Mar 30 12:38 PM

[RealMccoy:]

Too much work..loading I pod..wires, hookup..paying per song. Let the big guns in New York do the programming for me..and the music variety!!! WOW!!! I would have to spend 8 hrs per day downloading..blues, jazz, classical, outlaw country, 60's rock, hair bands, bluegrass...etc. For pennies a day I have Sirius and take it with me everywhere..fropm Tx to our summer home in Canada!

2008 Mar 31 10:25 AM

[bertha:]

I love my Sirius. I don't have time to maintain (read search & download) my entertainment. I have an iPod & I love it but I like the variety & the spontinaity of radio & satellite just ups the game for me. I recently moved to the boonies where redneck, right wing & Christian radio rule. NPR is only on 1/2 day... so satellite keeps me informed, amuzed, & dancing whenever I want. Frankly, I find new music for my POD more there than when I surfed the net...
The customer services for anything other than buying sucks but so far so good.

2008 Apr 06 05:46 PM