Thursday, November 1, 2007
XM vs. Sirius and The Merger
There is a proposed merger between XM and Sirius Satellite Radio companies. They are the only two companies in existence. As one might expect, getting a satellite in space and filling it with programming is an expensive proposition.
Recently, a merger was proposed between the two companies. This merger is being opposed by the National Association of Broadcasters (NAB) http://www.nab.org/AM/Template.cfm?Section=Home
To oppose it for fear that it is a monopoly is conceptually correct. Dig in a little more and you realize that opposition for that reason is not right.
First of all, to be a monopoly, consumers must not have any other means of receiving the same service. If I choose, I can listen to any free radio, mp3 player, CD or chat with my wife in the car for entertainment.
Second, it is argued that the rates will go up. They may. I am more likely to expect a la carte or cafeteria type plans where I can pick the stations I want and pay accordingly.
Third, if the NAB is going to cry monopoly here, they better crack down on Infinity and Clear Channel. They have done so much damage to radio and the music industry already because of their monopolized approach to content.
There is proof against their biggest argument which is my first item above. If consumers truly did not have access to other sources, the membership of Sirius and XM would be millions and millions more than it is. Currently there are around 14 million satellite subscribers. That is barely a drop in the bucket. People MUST have some choice. It is because of the limited number of subscribers that the merger is needed. With a merger, this excellent radio entity can survive and I will not have to listen to terrestrial (testicle) radio ever again!
The opposition to this is simply the radio industry scared stiff at the public's perception of satellite radio and their inability to compete with it. Competition...still the best incentive to improve!