FCC tentatively approves XM / Sirius merger
By Nilay Patel 
posted Jul 23rd 2008 2:49PM
posted Jul 23rd 2008 2:49PM
We basically knew the FCC was going to approve the XM / Sirius merger after the DoJ approved it earlier this year, and it looks like the communications agency is just about ready to sign off -- the Wall Street Journal is reporting that a majority of FCC commissioners are close to approving the deal. Word is that XM and Sirius will have to fork over an additional $20M to make it happen and agree to several enforcement terms, but it's all up in the air until this goes official. Let's hope that's soon -- after a historically long delay, it looks like there's finally some light at the end of the tunnel.[Warning: Read link requires subscription]
yay!! Make an iPod touch app already :)
plus freakin one!
I want a Sirius app for my iPhone so badly! Who's up to it?
I believe this is the first sensible comment Erik has posted.
It exists already, it's called uSirius. It's not in the app store yet but I had it installed on my 1.1.4 jailbroken iPhone and it works GREAT.
Another method world be to stream from your computer using Orb, which certainly is not the best option but will get the job done.
yes but my ipod touch hasnt been jailbroken yet.. plus i want it from the company, not someone who charges for it, like on installer app.
Yes, but 1.x apps don't work on 2.x, so uSirius is out of the question too until they update it for 2.0.
... but what im saying is that the company should develop for the 2.0 platform.. much more stable.
well which is it?
http://news.yahoo.com/s/ap/20080723/ap_on_go_ca_st_pe/fcc_xm_sirius
At the moment nothing has been decided yet.
It would seem that this article is a little premature.
"a little premature."
It's ok, my girlfriend says that's normal.
That's a link to Adelstein's decision...decision #4 of 5. His vote was NOT the deciding vote: Tate's is. She has yet to officially vote, but stories abound that she will vote "yes".
Richard: Haha, I knew someone would comment on that.
syphix: Yeah, that's what people have said. But she was also the one who was up in arms about how they went about the merging process in the beginning, so we'll have to see. I'm hoping all goes well, but I don't want to get too excited yet.
Finally, but in the end the satellite radio business is dead.
The vast majority of new subscribers are people who get the service free in new cars. And the churn rate on these are high.
Terrestrial radio, CD's, car based hardrives, PMPs, have flooded the market with options that don't require monthly fees.
You don't think those subscriptions are paid for? The dealer pays for the year subscription (at least is the case with my BMW), and after that, you pay to renew.
And ask anyone who is a subscriber, they'll probably renew. I know I will. Satellite radio blows away any other radio, and the variety it adds can't be gotten from static media (CDs, MP3s, etc). In my car I have Sirius, my iPod, HD Radio/FM/AM, and CD. I listen to Sirius all the time, or my iPod if I have something specific I want to hear. I listen to the radio maybe once a week, and I've yet to ever put a CD in the car.
The sound quality argument is lost since HD radio is widely available and your BMW should have it pre-installed. The quality is the same as satellite.
Most of the prepaid subscribers do not renew. XM and Sirrius had to admit that. Both companies have yet to turn any profit and constantly refinancing their debt.
When their investors (the only way XM and Sirrius actually have operable funds) begin to pull away because they are turning a profit, the companies will fail.
I'm not going to argue with the available content and say whether satellites is better or not. I would argue that their business is not working unless they raise monthly subscription fees much higher. They won't do that because customers will leave. This means they don't make money.
Unless you can solve that problem, the companies have to fail.
Are you willing to pay 3 or 4 times as much as your monthly subscription to keep the service from going out of business?
When their investors (the only way XM and Sirrius actually have operable funds) begin to pull away because they are turning a profit, the companies will fail.
(I meant to say AREN'T instead of ARE)
You are yet another person who believes everyone lives in New York City and likes top 20 music. I like jazz and where I live, the only way to get jazz is to pay the subscription which I'm very happy to do.
I live in Houston, TX and have three free stations that play jazz music. Two are full time and one is in blocks.
Maybe you should move?
People need to realize that satellite radio WILL slowly start adding advertisements because they can't afford to not do it. They both even admitted that it's a possibility if they don't become profitable with subscribers only.
In the end, I'm not arguing over quality or choice with satellite radio. I'm arguing that they can't continue to exist unless they turn a profit.
Sirius is great and for anyone who lives in the boonies where they have one AM country station, it's a Godsend!
HD radio is a good option as long as you live in their market areas but for people who drive long distances or want a consistent station no matter where they are, satellite is the best option.
I wasn't arguing quality. Hell, HD radio and Satellite radio are barely any better than a good FM signal is. FM isn't really that bad if you have a good signal. And HD radio is only available on about 3 stations here, and I don't really like any of them.
I like the stations and the variety and the ability to listen to only one type of music. I mainly listen to Octane (hard rock) or Lithium (90s alt). The alternatives are mainly generic rock stations that play both of those, in addition to all kinds of other music.
I'd guess that the people who don't renew are people who don't even care about music or realize they even have satellite. For those who like music, most would be happy to pay the very small cost that there is to have even one station they really like.
My other point about variety is the ability to listen to news stations, or sports stations, or a variety of talk stations, etc. Sure, not everyone cares, but I can't think of anyone I've ever talked to, who liked music, that isn't happy to pay the fee.
As for the future, anything can happen. You can theorize what costs will be, or if there will be ads, but what matters is what there is now. Once they merge they can likely consolidate costs greatly, and possibly even get more people to renew if their car currently only does one or the other (once they have more station choices). So when costs go up, or there are ads, then I'll think about if I want to continue to subscribe, but for now, It's a bargin in my opinion.
yeah, i mostly just listen my torrent filled ipod connected to my deck when im driving
i dont know why some think satellite will fail when xm has 10miilion suscribers and sirius has 9million... with both together they will have a better combination of music then terrestrial will ever have also adding to the fact that no AM frequency station will ever top the quaility of sports programing... i mean where else will you get you maxim radio fix..
people think prices might go up when i fact DOJ and the FCC have specifically made it clear that this can not happen if they were to approve the merger on top of the 20million dollar fine they have to pay up before the deal goes thru also keep in mind they will have to provide radio that can receive both signals and also offer an alacarte service where you choose what channels you want for a specific price
Jose,
You have no idea what you are talking about. Terrestrial radio has many more listeners than satellite. If satellite approached half of terrestrial numbers, they may stay in business.
The most popular show in the US whether you like him or not is Rush Limbaugh with an average of 20 million listeners alone. That's more than the total subscriber base that splits its listening across many stations. Howard can't even come close to this number alone even when he was on terrestrial radio.
Some people actually like radio personalities. That' is why there will always be a market for this. May not be a large and successful market, but it's there. Too bad the FCC was slowing this down. The FCC should just FCKN DIE already. What the FCK? It's not like they stop the immoral crap that's on TV and the radio. It's getting worse all the time. No wonder kids are turning into whores at such an early age.
P.S. And don't give me this sh!t that "it's the parents fault". They're a product of the crap too.
@ishism
Sorry buddy, it IS the parents fault. And if the parents don't know any better because they grew up on the the trash then it is THEIR parents fault as well. Watching garbage is not a requirement.
I canceled because of the 4 day work-week, endless, unannounced vacations, fake listener calls, and constant plugs for HTV. However, because Sirius is so desperate for listeners and need to pad their numbers, they never turned off my receiver; going on 4 months now for free. I hear that this has become common-place. You may want to give it a try.
I'm an O&A/R&F fan as well (I get XM through DTV), and I'm afraid that they're finished once he merger happens. That's what happens when you monopolize an industry - less consumer choice.
So basically a $20 million bribe will get it done? Our government is so f'ing corrupt.
Seriouly. DIE FCC. You have failed in blocking the crap aimed at our youth. Your useless these days.
I hate to break it to you, but this merger is all about cutting costs. Howie will be lucky to see $10M a year if this is approved.
And as an XM sub since they went on the air, I fear that light in the tunnel is Mel K. coming to destroy what I love about XM.
I listen to XM every day and were it not for MP3 CDs in my car, I'd have nothing to listen to on the radio. Terrestrial radio is awful (tried to suffer through it when my XM had to be repaired) and I'd never go back to it. Been an XM subscriber for...shoot, at least four years now?
On XM, I mainly listen to two talk channels (XM Home Ice and The Virus) and one music channel (The Verge) and have no problem paying for the ability to listen. With XM Home Ice, I get hockey talk that I can't find anywhere else. The Virus...well, you have to be an O&A/R&F fan to appreciate it. The Verge, it's introduced me to so much great music (that I inevitably end up buying to support the indie artists) and still continues to.
Business-wise, they're not doing so hot. But quality of service? I can't complain one bit.
complaining about howards work week is pretty silly!
He does what a 5 hour show once you take out the small breaks and then the wrap up show is another 1 hour at least.
not many other talk DJ's do 20 hours of live material a week?
They let the big oil companies merge with almost no questions asked and now we have record gas prices...
But our government has no problem wasting almost 2 years on deciding if satellite radio will be a monopoly, when it is not even a required expense.
We have our priorities backwards
Well durr, I mean after all Bush does love his oil.
I hope this works out well, because that would be awesome.
As an XM sub and a Virus fan, I too fear that the bbbboys are done.
Just in time when I am going to cancel my account
Go ahead an cancel - I did, and 4 months later they still haven't turned off my receiver because they want to pad their listener numbers and play-down their churn rate. At the very least, if you call and tell them to cancel, they offer you 3 months for free if you'll stay.
Yes. let's all be cheap fucks and get free XM/Sirius. How about we call the cable company and tell them we don't want them. ask for a week free? Then maybe our electric company? or our gas company? hell. let's all go out and get welfare.
The merger will not create a monopoly. Is technically a monopoly among satellite radio providers? Yes. Is it a monopoly is ways you listen to content in your car or home? No. That is the question the FCC and DOJ were answering. The reality is that we have tons of choices of how to listen to content. Satellite is just one of them.
If you define "entertainment" in large enough terms, you can argue that there monopolies are impossible, and we know that's not true.
The satrad merger will create a monopoly. It delivers new (i.e. content you haven't bought or heard previously) uncensored content in a mobile form across a uninterrupted network nation-wide. There are no other products on the market that can do that. Ipod? No; it only allows you to listen to content that you have already heard. Terrestrial radio? Obviously not. The internet? Can you drive while surfing the net? Wifi radio? Can wifi provide seamless coverage across the country? No.
If you support the merger, that's fine, but the argument that it won't create a monopoly is illogical.
Monopolies are about removing choice from consumers. The choices of what you can listen to at home or in your car are vast. So in the end, choice is not be eliminated.
Monopolies are about removing competition, not choice. They are similar, but not the same thing. You can make anything a monopoly or not a monopoly depending on how narrowly you define the market involved. This merger will obviously create a monopoly in the satellite radio market. The real question is whether XM and Sirius competing with each other keep consumer prices down and drive innovation, or does competition between satellite radio and other alternative forms of entertainment drive pricing and innovation.
As Shane pointed out, monopolies are about COMPETITION, not choice. What's two competing companies minus one competing company? One monopoly. But at this point, if its the only way satrad can survive, then they should merge. I love the product, and I'd rather have one player in the sector than no sector at all.
Well, if FCC approves this, the issue of price goes out the door. The FCC is going to set caps on price if the merger is allowed.
This is one of the cornerstones to the prediction that satellite will ultimately fail. The primary revenue stream is regulated. Ads will definitely increase, but how many advertisers will flock to such a small audience?
I have to agree that this doesn't really monopolize anything. Yes, they will be the only satellite radio provider, however, the choice is to listen to satellite, and pay for more channels, or to stick to your ipod or terrestrial radio for free. It's not like they can jack up prices and people are forced to continue to buy it because it's something they need in life. As kjb has said in previous posts, satellite sits on a fine line of where it's worth it's cost and if it will keep people paying when given free alternatives.
They can monopolize the satellite radio business all they want, but if they crank up the prices, they will only push satellite radio towards the extinction when people refuse to continue to pay for their more expensive, albeit better selection of music.
@Artie Lange:
True monopolies create a forced barrier to entry for new enterprises. For example, cable television is a regional monopoly. At my home, Time Warner OWNS the rights to the cable lines. Comcast cannot lay cable in my neighborhood, no matter how much they spend -- the city just won't allow it.
This is not the case with satellite radio. You, me, or anyone else with the funds can launch a satellite and join in the satellite radio business. Therefore, a combined company wouldn't be a monopoly, but simply a free market where only one enterprise is CHOOSING to participate.
Stern does less than 5 hours a day (the commercial breaks - of which Stern personally gets a cut of the proceeds - are 10 minutes and getting longer), and WUS does not feature Stern or any of the other major talent. Further, Stern takes a week-long vacation nearly every month, and usually two-weeks off around national holidays. He admits that he's tired of radio and wants to retire as soon as his contract ends.
As for who else does 5 hours of entertainment a day, O&A do 3 hours of network radio, then 2 hours of XM radio - 5 days a week. Bubba the Love Sponge (who admittedly sucks) has a similar deal, although he ends up doing closer to 6 a day. George Norry (sic), the guy who took over for Art Bell, does 5 hours a night from midnight to 0500, as did Bell before him for nearly 20 years.
I love my sirius and have had it since Stern came over, you can't beat uncensored radio. The reason this merger took so long is because the NAB is scared of satellite they've tried every stalling tactic possible, obviously they see it as a threat. regular radio especially here in Canada is horrible. Long live Sirius!!
Terrestrial radio never saw satellite as a serious competitor. If they did, they would do a lot more to stop it.
The reason they don't is because of profitability. All of the popular radio shows in the country are only accessible on terrestrial radio and make lots of money are are increasing listeners. Howard Stern's audience actually shrank when we went to satellite and hasn't grown much. With his current audience, he couldn't pull in the advertisers that would pay him to stay on. Sirius is in real pickle when they have to finance debt just pay Howard. Both firms can't afford to stay in business this way.
Whether you like it or not, satellite radio will not survive. Wall street is betting there failure because they don't see a future in it.
Currently the most profitable segment of terrestrial radio is Talk Radio which include political and sports talk. Advertisers pay big bucks to get on these shows. Standard music radio (which does suck) doesn't pull much money in. Why would i listen to a music station if i can pick my own playlist with songs i like and play it on CD's, HDD based, or MP3 players in cars?
Shane: The only ads Sirius has are perhaps for other stations. Sometimes they break to a DJ, but they never have "commercials".
Whoops, this was to the post below!
I have subscriptions for three radios on XM And two on Sirius, plus I subscribe to XM's traffic service in my Infinity. I don't see them going under, as after they merge they will be able to cut costs tremendously when it comes time to renew their content contracts. They were both competing over the same content (NFL, NBA, NCAA, Oprah, Howard Stern, etc.), but after they merge they won't have to pay the ridiculous amounts to get content which is going to make them much more profitable.
As far as advertising goes, XM already plays advertisements on all of its stations, including the music only stations. Sirius plays advertisements on all of its stations as well, but no third party advertisements on music stations (as far as I know).
The ala carte pricing might just be the best thing ever for consumers. I know I could pick probably 20 channels to listen to and be perfectly happy. I really only listen to around 10 different XM stations most of the time.
A lot of posters here obviously have no clue about Howard Stern or satellite radio. They are just spewing nonsense. Real Stern fans love the show more than ever. I actually enjoy the Friday's off because it gives me a chance to listen to something else for a change.
Terrestrial radio is unlistenable after having satellite. The unbelievable long commercial breaks, horrible and watered down talk programs, and playlists that are on a top 20 loop are just unbearable.
Obviously the NAB is terrified by satellite Radio or they would have not gone to unprecedented extremes to fight a merger that should have been approved within the first month.
I completely agree. The detractors have always been a tiny, vocal minority. Meanwhile, the millions of fans continue to laugh and enjoy the show more than ever!
Agreed. I would rather listen to 4 days of Sirius Stern than 5 days of FCC sanitized Stern on broadcast.
Of course Broadcast has more listeners, but that does not mean Satellite will fail any more than Broadcast televisions higher viewer numbers meaning the failure of pay programming like HBO.
Combined they will have close to 20 million subscribers and will save money from not having to advertise against each other or have a bidding war over exclusive content with each other.
I'm in Alaska
We have satellite TV
But not radio
Why would people be so against this merger? If you don't want satellite radio, don't buy it. There are many people who are perfectly happy with terrestrial radio and that's fine for them. I have Sirius and I only listen to terrestrial radio on a rare occasion for sports talk. I would listen more if the commercials weren't so prevalent, but I am willing to pay for the level of entertainment I get from Sirius and to escape all those commercials. I am WILLING to pay. I don't need to pay. It has been made clear that prices will not be going up if this merger ever actually goes through, and it will give people who want satellite MORE choices. I would love to have the option to choose a different package next time I re-up my subscription.
This shakedown by the FCC is the result of nothing more than corruption in our government. These companies are still young and are struggling to find their footing and lobbyists are so afraid that their outdated business model will be further threatened by other means of entertainment (such as Sirius/XM, internet radio, downloading music and podcasts) that they are trying everything they can to cripple one of those forms of competition. Just the fact that they are so threatened proves that there is competition... the one thing that preventing monopolies is supposed to protect.
Any word on if the right wing freaks in the nation got what they wanted, to force XM/Sirius to comply with OTA decencies standards?
As far as I know they didn't, but then again I believe the left wing freaks got what they wanted, which is minority based programming.
I'm in Alaska
We have satellite TV
But not radio
I will believe it when the phat lady starts singing...
It hasn't been "right wing freaks" who've been holding this up. It's been terrestrial radio's NAB with the side show of various black groups and politicians trying to steal as much as they can in return for their support -- "Give us 50% of the spectrum you paid for and built up and we'll approve".
I don't see how this works once Howard's contract is up. He isn't going to work for less but a combined company can't afford another mega-contract, let alone an even bigger one. And letting him go could lose 43% of the Sirius morning audience which would be one out of five subscribers. Though, if a lot of them got lifetime subscriptions, it might not hurt that much, it might even help by getting rid of people who aren't going to pay again.
I've got XM. I enjoy it. But I don't listen to the talk with the exception of the comedy channels. For me, it's about the music and getting to listen to all sorts of stuff I could never get to via my CD purchases or terrestrial radio.
Howards commercial breaks may be for 10 minutes, but they follow no regular pattern. He usually doesn't go to his first commercial break until he puts in one hour straight. Compare that to formatted talk DJ's who tend to do 15 minutes before 7 minute breaks. You pull out all the commercial time and he does around 4 hours straight show time. I don't think any other DJ comes close.
@ TVGenius - its more about trying to make a profit and surviving. XM was so dominant and look what happened? They were to greedy to offer HS a decent deal, and Sirius went all out - now look whos buying who. For the record and if you are capable of reading - XM will pretty much remain the same. Stop crying.
Its been a long time coming. I am glad now that I will not have to choose which radio I want to activate. I will get all my sports and Howard too. The people who throw the word monopoly around are the one ones who don't understand the concept. The Justice department has declared the combined companies to not be a monopoly, but all the "officials" who are opposed to it still refer to it as such. Why? Because its an incendiary term. It just proves their ignorance and shows that they all have a personal agenda.
To the people who tout HD radio.. and the whole free thing... remember you get what you pay for. Hi def -digital commercials. It will be the same crap radio corporations like CBS spew on the air now. If you don't like Satellite radio don't get it. I have cousins who think cable is a rip and they enjoy the 5 analog channels available to them (until Feb that is). So enjoy your HD Commercials, and I will enjoy my unsensored Quality Satellite radio. Congrats XM/Sirius on the Merger approval. "F" the NAB
I have TimeWarner cable service delivery to my house. They have a la carte pricing with packages of channels available to me. Their strategy is to bundle popular channels with less popular ones. If I want the good channel I have to pay for a set of channels - many of which I could do without. I'm guessing I'll see the same thing with my XM subscriptions.
I have what I think are pretty eclectic interests. I like the Fine Tuning, Deep Tracks, BPM and The System channels. I also enjoy about five other channels in equally diverse genres. I'm guessing I'll end up paying for several 'packages' and end up paying more for what I use today.
As for the dismissive comments here about the value of the service, there are clearly people who are ok with competing delivery mechanisms. That's fine for them. Where I live there is simply no way to get a similar level of service from a single approach. Yes, I can load up an iPod with my favorite music. Yes I can get an FM radio at my desk. It is less convient for me to do so.
I pay for three XM receivers and am happy to do so. I'm concerned that with these changes I may not continue to be so happy.