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Jawbone54 · 09:28 PM

Sirius to buy XM for $4,600,000,000

I think this was only a matter of time. The satellite radio market hasn't been big enough for the two companies, and I think this is going to really help satellite radio take off.

Or do you guys think this makes little difference anyways?

[EDIT] Changed from million to billion

imitchellg5 · Feb 19, 2007, 09:01 PM

Doesn't make a huge difference now that automakers have been starting to include both with new cars

faragbre967 · Feb 19, 2007, 09:15 PM

4.6 million seems cheap for such a widely known company. Seems like it wouldn't even offset the cost of one satellite.

Jawbone54 · Feb 19, 2007, 09:28 PM

WHOOPS! That would be $4,600,000,000...

Stogieman · Feb 19, 2007, 09:55 PM

I hope this doesn't mean that Sirius users will have to suffer with commercials on our music channels. What will happen to our existing gear or do we need to change hardware? In long run, I do not believe the "new" company will keep both XM and Sirius running separately on different radios, codecs, protocols, frequencies on S-band or even different sets of satellites.

Oh one more thing, how long do you think it will be before prices increase?

Jawbone54 · Feb 19, 2007, 10:07 PM

I dunno. To be honest, I'm not interested in getting either for myself. I just knew this was an issue for others.

alligator · Feb 19, 2007, 10:10 PM

Um, they better give both subscribers more channels then.

stevesnj · Feb 19, 2007, 11:12 PM

Originally Posted by alligator

Um, they better give both subscribers more channels then.

Why should they?

faragbre967 · Feb 20, 2007, 12:06 AM

lol you can tell I didn't read the article. 4.6 billion sounds more like it.

I've got XM and I love how it's broken into channels like a normal radio. Sirius (from what I've seen) seems to be by category or something and it's sorta tough to drive and flip through. I hope they compromise on some sort of happy medium.

And for the legal eagles, how is this as far as anti-trust goes. Sirius and XM are the only satellite radio companies I know of, so does a merge make this illegal?

stevesnj · Feb 20, 2007, 05:23 AM

Originally Posted by faragbre967

And for the legal eagles, how is this as far as anti-trust goes. Sirius and XM are the only satellite radio companies I know of, so does a merge make this illegal?

I believe that this is a problem because this will create the one and only huge sat. radio company thus monopolizing the industry.

wallinbl · Feb 20, 2007, 07:36 AM

Originally Posted by stevesnj

I believe that this is a problem because this will create the one and only huge sat. radio company thus monopolizing the industry.

Define the "industry". Satellite radio? Radio entertainment? Broadcast entertainment?

stevesnj · Feb 20, 2007, 07:50 AM

Originally Posted by wallinbl

Define the "industry". Satellite radio? Radio entertainment? Broadcast entertainment?

Satellite...

wallinbl · Feb 20, 2007, 09:01 AM

Originally Posted by stevesnj

Satellite...

So, they only compete with each other? Regular radio is not in the picture at all? Muzak? Music Choice? HD Radio? You have many choices in music entertainment, to limit the field to just satellite radio doesn't make much sense.

Dakar² · Feb 20, 2007, 09:19 AM

Yes, let's create a monopoly.

stevesnj · Feb 20, 2007, 05:53 PM

Originally Posted by wallinbl

So, they only compete with each other? Regular radio is not in the picture at all? Muzak? Music Choice? HD Radio? You have many choices in music entertainment, to limit the field to just satellite radio doesn't make much sense.

Let me restate...I didnt write my entire thought in my original statement...I can guess that the DOJ may think that the merger would be a problem as the 2 merged companies may monopolize Satellite radio. Thus making it difficult for new future Satellite radio companies to compete.

OAW · Feb 20, 2007, 06:19 PM

This will create a monopoly. Plain and simple. Prices will rise. Please believe that.

OAW

Dakar² · Feb 20, 2007, 06:28 PM

Originally Posted by OAW

Prices will rise.

With both companies claiming losses? Never.

olePigeon · Feb 20, 2007, 06:37 PM

Satellite is going the same way as cable TV. Everyone's going to buy it up and pay a premium for having radio with no commercials, then traditional radio will fall off the planet and commercials will be rampant in satellite radio. Pretty soon, you'll be paying $20/month for normal "radio" over satellite, but you can always pay $60/month for commercial free "premium" radio channels.

OAW · Feb 20, 2007, 06:37 PM

Originally Posted by Dakar²

With both companies claiming losses? Never.

Raising prices would be one way to improve profitability. Especially if you do it as small increases over time. People who have already paid money for the equipment and subscribe are going to be less likely to jump ship that way. They are losing money because their revenue doesn't cover their costs. Raising prices would be a no-brainer way to rectify the situation ... especially if your customers have no direct alternative.

This would actually be worse than what exists with Cable TV today. For most consumers, you at least have Satellite TV as an option if the price increases finally piss you off enough to switch. But with Satellite Radio ... if these two merge ... the ability to switch is gone. The only option you have is to cancel the service entirely.

OAW

Eriamjh · Feb 20, 2007, 10:41 PM

I would pay about $5 to $10 a month for radio. Nothing more. And if I pay, I want NO COMMERCIALS, ever.

They don't have a package for me.

Dakar² · Feb 21, 2007, 09:09 AM

Originally Posted by OAW

Raising prices would be one way to improve profitability. Especially if you do it as small increases over time. People who have already paid money for the equipment and subscribe are going to be less likely to jump ship that way. They are losing money because their revenue doesn't cover their costs. Raising prices would be a no-brainer way to rectify the situation ... especially if your customers have no direct alternative.

Exactly. But I suspect the threat of the other side not doing the same is keeping prices in check now. Unless they feel like doing CD-like collusion.

wallinbl · Feb 21, 2007, 10:09 AM

Originally Posted by OAW

Raising prices would be one way to improve profitability.

Why raise prices? Might be better to lower them. They have no additional cost per subscriber - they're sending the signal down to Earth whether you get it or not, so another subscriber at $5/month is better than no subscriber at all.

Consumers apparently don't perceive as much value in what is offered by satellite radio as what is being charged and thus far haven't appeared eager to sign up. Increasing their rates will create a bigger disconnect between the price and the consumer's perception and reduce your subscriber base.

Maybe it's time to remove the up front cost - give away the equipment for a 12 month contract, or make the radio be a rental that's included in the $13/mo. As an alternate plan, offer the service for $10/mo to those that do buy a radio. Asking people to fork out $80 plus $13/month for radio obviously isn't working as often as they want it to.

They need more subscribers, not higher prices.

pooka · Feb 21, 2007, 11:50 AM

I'm having a hard time caring. A monopoly on a service that didn't exist a few years ago. How many subscribers do these guys have? Less than Napster?

mac128k-1984 · Feb 21, 2007, 12:10 PM

I think they're going to have some hurdles to jump to get approval for this but by the same token I don't think the market can sustain two companies. I was reading on msnbc that there is some sort of law on the books that a satellite radio company cannot own another. If that is true then they'll need to have that law changed or some sort of exemption.

Dakar² · Feb 21, 2007, 12:13 PM

I think its something about one company can't have both licenses or something like that.

zerostar · Feb 21, 2007, 12:27 PM

If you do the yearly plan it is cheaper with either company. We have sirius and for 2 receivers it is $9.50/mo each. They will also do a few months free and special promotions if you call and try to haggle. I think we actually pay around $5/mo with all the freebies and discounts involved.

I use my Sirius everyday and love everything about it (especially not having to change the channel EVER)

I think a merger is good, they can't make money separately, there is too much overhead with this technology and not enough subscribers for 2 players. Unlike the HD-DVD wars where pretty much only the consumer gets screwed in the end, the loss for these companies is huge should they fail.

climber · Feb 21, 2007, 12:58 PM

So are these services going to be merged? Seems to me it would be cost prohibitive (or at least inefficient as hell) to keep both the way they are.

mitchell_pgh · Feb 21, 2007, 05:28 PM

I owned Sirius... but it just seemed dumb paying for something I could basically get for free.

It wasn't worth yet another subscription fee.