Sirius Satellite Radio’s $4.59 billion purchase of rival XM Satellite Radio was given antitrust clearance on Monday as the Justice Department concluded consumers have many alternatives, including mobile phones and personal audio players.
As I’ve said before,
XM plays great and eclectic music, while Sirius excels at talk radio. Traditionally, such mergers haven“t yielded a greater product, but a watered-down compromise of the individual parts. This, I fear, will doom the XMSiriusMegacombo far more than if they stay independent of one another.
The merger is still under FCC review,
… the FCC could be strongly influenced by the Justice Department accepting the satellite radio companies argument that they face stiff competition from traditional AM/FM radio, high-definition radio, MP3 players and audio delivered by mobile phones
and if I know the FCC, they’re all about the ClearChannel.
A good friend of mine (very savvy MBA with lots of experience) used to work for XM. She quit in disgust in the fall — the happiest moment of her life. She was frustrated to no end because the company had a really good product but seemed intent on running the company to the ground and interested only in finding ways to boost top executive incomes — the stories were what we’ve come to expect after Enron et al. Such a shame.
Obviously those top executives found it more profitable to sell their good product to the competition. *sigh*
Well, when the satellite companies started, they had a really different competitive environment – they sunk a lot of money into starting up, and did not count on the kind of competition they’re getting now from HD radio, internet radio, people carrying around a ton of music on ipods, and so on. I think the decision is right at its core – saying that satellite radio is not a unique market but part of a larger media market, and thus the merger doesn’t create a monopoly.
The real question is, how much satellite radio can you really sell, and does it support two companies? I think the answer to the second question is probably “no.” So Sirius and XM on their own are probably in a losing game, and the merger gives them a shot actually making money at this.
None of which is disagreement with your worries about programming quality, but just the business reality – which I think can’t support them both no matter how good a job they do.
Kinda sucks though.