NAB still yukking it up at Sirius / XM merger's expense

Since MasterCard wasn't so hip with NAB swiping its "priceless" advertising identity, the National Association of Broadcasters has returned for round two of its anti-satellite radio merger campaign, this time to point out the apparent hypocrisy (above) of Sirius CEO Mel Karmazin's "bizarre" self-contradictions. Sure, it might be pretty clear that the consumers win with a Sirius / XM merger, and NAB is probably being the one getting all anti-competitive on us here, but that doesn't mean we can't all get a few cheap laughs out of it all the same.

[Kev50027 @ Mar 20th 2007 5:43PM]

They really are making total fools of themselves. Maybe we should stop listening to FM. I'm sure they would still blabbering though. The only thing FM is good for is to wake you up, because it's so effin annoying.

[anonymouspimp @ Mar 20th 2007 6:00PM]

Why does everyone think that this is a good merger? because Sirius/XM say it will be?

Personally, I don't think everyone knows what to expect from this merger. My guess is lower prices for a few months (maybe a year), so people don't cry about the merger, then they go right back up to where it is, or higher.

Stock prices rise, while quality of satellite radio content slips... the suits at Sirius/XM get fatter pockets and the consumer has to deal with the situation or be forced to listen to FM crap...

I guess we'll see what happens if this goes through. I'm not expecting it to be good. And i'm usually an optimist.

[Christopher Price @ Mar 20th 2007 6:30PM]

I think I made my comments pretty clear last round as to why I think the NAB raises some very good points... points the FCC shared when XM and Sirius launched. But, I'll leave it at that this time around.

I will say this ad isn't nearly as good as the last one... the last one was, well, priceless. This one is confusing and not convincing. Maybe the NAB should rip off a Mac vs PC ad next time...

"Hello, I'm satellite radio, and oh, I'm the same satellite radio."

- Christopher Price
http://www.phonenews.com

[Smoke_Dawg_187 @ Mar 20th 2007 9:35PM]

@ Chris Price

I believe you post just to play devils advocate. Most of your posts are quite silly actually. Chris, what's your stake in satellite radio? Do you own either service? You said in your last comment, "that there is a market base of customers where satellite radio is exclusive. The two are not non-rival, but they are not complete rivals either."

Cellphones do compete with landlines for customers. Should the FCC have prevented all the mergers of all the cellphone consolidation? With the mergers we have much better service than the small operators would have provided.
Land lines have been in a serious decrease ever since cell phones became viable, but only after huge investments, mergers and consolidations.

What is so exclusive about satellite radio? You "believe that there is a specific market demand for satellite radio, independent of internet and terrestrial radio." Then why stifle it? This specific market demand is a result of people tired of terrestrial radio. It's a great alternative.

Your argument about the FCC originally saying they could not merge is invalid now. Laws and rules change. The FCC said they would probably grant a request for them to merge.

"Until people can tune into a radio station over the web from their car... satellite radio will have an independent market that can (and I believe will) be monopolized."

What's the percentage of people in the U.S. with Xm/Sirius? That number is pretty miniscule. I can currently do that now with my Cellphone/PDA, but my data plan is much more expensive than what I pay for satellite. Why don't you complain about the unfair advantage terrestrial radio stations have over interent/satellite radio. They have to pay more in licensing fees to the RIAA. The NAB is spending $200 million in advertising for HDradio. Had you ever heard of HDRadio before satellite radio? Of course not, because a single satellite company will make the NAB work to develop better talent, equipment and programming for terrestrial listeners.

[Christopher Price @ Mar 20th 2007 10:13PM]

I think at this point it is best to agree to disagree. I could refute each of those points with counter-points... but the points you gave are counter-points to the points I already raised. It is clear that there are two opinions on this, and neither will be resolved in the comments thread of Engadget.

Plus, I am not really interested in continuing to respond to comments that claim my postings are "silly". When I give an opinion, I back it up with facts and cogent thought. Attempting to straw man my arguments only inhibits your own.

[Seth @ Mar 20th 2007 6:52PM]

"Sure, it might be pretty clear that the consumers win with a Sirius / XM merger..."

How is this a "sure" thing? From my understanding, monopolies historically have led to a DEGRADATION in the customer experience, not an improvement. Without competition there's no incentive to improve the service and/or reduce prices. That was why AT&T was broken up many years ago -- they were overcharging their customers for decades-old technology. We might not have our precious cell phones right now if that monopoly had stayed in effect.

If XM and Sirius merge, and you're only getting satellite radio from one source, what is pushing them to spend money improving their signal, or their customer service department, or cut prices as efficiencies are brought online? Nothing, really. They do what they want (within limits of course), because what other choice is there? Local radio? Give me a break, it's not the same at all. Staticy commercial-ridden channels that change depending on location vs. clear commercial-free (usually) channels you can rely on? Not much of a choice.

Apples and pears are kinda the same. But if you want a pear, an apple doesn't quite cut it...

[Mr. B @ Mar 20th 2007 6:57PM]

For the record, there is a third satellite radio company, but it doesn't operate in the States. - http://www.worldspace.com/

[Jamie @ Mar 20th 2007 7:41PM]

errr, if it doesn't operate in The States, it doesn't exist. All you wierdos crying monopoly, I hear your cries. Problem is, if these two companies don't merge they will cease to exist in like no time. So please merge on! I wanna be able to listen to both the NFL and baseball. Nothing wrong there. Oh, by the way, I am willing to bet a million dollars that all these freaks saying no to the merger don't even subscribe to the service.

[Pablo @ Mar 20th 2007 8:11PM]

how do consumers win from a satallite radio merger? i don't care about being able to listen to stern, nascar, baseball, oprah, footbal, basketball, etc... if at the end of the day, i have less choice, more commercials, and higher prices...how is a merger good for consumers? it's good for xm and sirius only

[Jason @ Mar 20th 2007 8:25PM]

John Ashcroft is doing just about as good of a job with this campaign as he did with our justice system.

[Ethan @ Mar 20th 2007 8:33PM]

Seth: The reason this isn't a new AT&T is twofold.

First, there isn't the same pressing need for satellite radio that there is for a telephone. People have needed at least one telephone per household for quite a while, and if they wanted a telephone, they had to look for AT&T. Therefore, AT&T could do whatever they wanted; their customers were trapped in their need for a telephone number. There's no similar need for satellite radio; people can get along just fine (I do!) without it.

Second, because they're still facing competition, just not in the satellite realm. AT&T was able to maintain its monopoly because there are only so many places one can put telephone wires, and the places they weren't already on were prohibitively expensive. Any fledgling competitor would either need to use AT&T wires, or earn the capital to purchase land to lay new cable - particularly difficult when talking about cities.

Sirius/XM, on the other hand, can be challenged with an FM tower. While the benefits of satellite radio are myriad, most of them aren't compelling enough for the average person to persuade them to adopt the new technology and the new cost. Therefore, if Sirius/XM decides, in its new monopoly status, to decline in service and increase prices, they'll just lose their base and have significantly fewer new subscribers. It would be pure suicide.

[Dr Buzz0 @ Mar 20th 2007 9:02PM]

It's not really a monopoly: They still have to compete with regular radio, HD-Radio, podcasts, online stuff. Satellite radio is a luxury item. They can't price gouge it like phone service or oil, because the product they are selling only has so much value. People are not going to pay $50 a month for commercial-free "digital quality." More likely they'll just deal with the commercials and occasional reception issues with FM. Or they'll go HD or something else. Hence, I doubt the price will go up much.

[awsomecoolstien @ Mar 20th 2007 9:17PM]

They can't raise prices and cut quality because their main competitor is free, if they drop quality people will go for the free crap over pay crap, so there is a reason for them to keep quality up even if there is only one company.

[Frankenstein Black @ Mar 21st 2007 11:40AM]

Hey C Price, MEH! WHY? BECAUSE IT’S GOING TO HAPPEN!
Won’t go into reasons why it’s not really a monopoly because it’s been done here (and elsewhere) adnausium.
But it will happen because:
- Consumers (the ones that care) want it.
- Car Manufacturers want it (selling point and reduced cost).
- Artists want it (another outlet to pedal their warez).
- The RIAA (believe it or not) want it (much more controlled environment than the blasted internets and their downloading models).
Oh, and unlike regular radio, SAT radio providers pay us fat fees to boot.
- Wall Street wants it (they’ve been saying all along that a merger is what’s needed) for SAT radio to survive and be profitable.
- The only one that doesn't want it is who? The NAB. To what? Protect there Pal's monopoly.
Now we are sorry if that bothers you in some way, but this is Engadget sunn, and us regulars are not so easily fooled by “smoke and mirror” speak. Nice try though ;^)...

[LC @ Mar 21st 2007 11:41AM]

I mentioned this in another entry, but the thing I find most amusing is that the NAB is insulting everyones intelligence by trying to convince people that a merger would result in a monopoly. It's as if they think people are stupid enough not to realize that Satellites main competitor is Broadcast radio.

Think about it. Why would the NAB spend this much money on ads against the proposed merger? They certainly aren't doing it out of the kindness of their hearts. It's because they fear the merger would make a stronger company and a stronger competitor. Therefore there would be no monopoly.

[matt.k.mead @ Mar 21st 2007 1:10PM]

I have sirius and I have to say im all for this merger, because one of my biggest complaints is the signing of certain sports to only one brand or certain channels to one brand.

Personally I want the best of both worlds and a small price bump to give me one solid satillite radio with zero commericals would make me happy.

So far I get about 80% of that with sirius, once xm joins them I will be happy I finally can listen to all sports.

[hibiscusroto @ Mar 21st 2007 1:40PM]

Dear NAB,

WAAAAAAHHHHHHHHHH!!!!!

[Justin Turner @ Mar 21st 2007 1:45PM]

There are a lot of comments here - most from people that don't seem to have or outright say they don't have satelite radio. I have XM and I do oppose this.

I enjoy XM the way it is - there are great radio stations that I feel Sirius does not have or does not do as well, and even though I would like football, I really don't care to pay for it. I'm personally scared that this will lead to some of my favorite stations getting axed and I'll have to pay more money for the ones that remain.

Ultimately, I feel that both companies could survive separately if they would spend their money better. My worries about cost increases could be put aside if they figure out a way to adopt a pay-for-services pricing plan where I could continue to pay $13/mo. for music and news, and if I wanted Howard/ACC/Baseball whatever, that would be extra. I could end up paying more, but at least I could control how much so to an extent.

Also, the idea that this isn't a monopoly is a little puzzling to me. I undertand it's a luxury and I could drop the service, but I spend over an hour in the car every day and in many metropolitan areas, that's not uncommon. People want to be entertained during their increasingly lengthy commute - FM radio has commercials and CD's/iPods don't expose you to new music nor are they particularly spontaneous. Sat. radio is unique and ultimately, the result will be cable TV - a luxury service that only has 1 provider in my area that I'll either have to drop or settle for high prices and shoddy service.

[kballs @ Mar 21st 2007 1:55PM]

For those that think FM+Sirius would be a monopoly: there is already an FM radio monopoly: Clear Channel. It is probably the number 1 reason why people subscribe to sat radio in the first place.

For those that think having only 1 choice in sat radio limits your choices: iPods, FM, HD Radio, sat radio, internet radio, and new cellular media streaming services. Nobody is going to handcuff you to your sat radio and force you to pay a monthly subscription fee. With all these choices, sat radio will have to preserve content quality and variety if it wants subscribers. FM radio and their monopoly isn't constrained by direct subscriber revenue which is why their quality and variety is crap. Their ad revenues are sustained only because they can say "we can broadcast your ad in every market on every station across the country". They don't have any real responsibility to their listeners because they aren't customers - their customers are the advertisers.

[Rat Bastard @ Mar 21st 2007 2:48PM]

Just exactly who the eff are these ads for? The handful of people in government that'll vote on the issue? What the crap...am I obtuse for not seeing why they're even doing this?

Oh, I get it. The NAB is blowing government money, so it's 'free money'. Bastards.

[Joel @ Mar 21st 2007 4:56PM]

NAB = Desperate.

That's all.

[Denis @ Mar 21st 2007 8:27PM]

I think that they should be allowed to merge. I do not think that they will be a monopoly because there are lots of other options like free radio. You have people saying that they will increase rates, that would be suicide for them because people do not have to subscribe to radio and they know this and will not raise rates to highly inflated rates like NAB is claiming because the would start losing customers left and right.

[Grant @ Mar 22nd 2007 11:23PM]

The morning zoo shows of FM make suicide seem like a reasonable option.
the problem with FM is the lack of good content/choice, maybe if they focused on that instead of pumping out things like HD radio, they would win some listeners back to something that is priced great(free).
but i guess it continues match with the saying: "you get what you pay for"

[Ira Zipkin @ Mar 28th 2007 5:49PM]

As an XM user (relatively satisfied), I'm amazed that everybody's buying one premise whole hog: Mel Karmazin's assertion that post-merger consumers will have more choice. From what I understand, each service's bandwidth is maxed out, so adding, say, baseball to a Sirius sub's menu means axing many Sirius ,channels. Additonally, the services aren't technically compatible, so you can't just give one service's whole array to a sub of the other.