CNN Breaking News

The Justice Department has approved a merger between Sirius Satellite Radio and rival XM Satellite Radio.

Comments

[XMSiriusClearChannelHalliburton]

All ur radios r belong to us.

[Marty West]

About friggin' time.

Amen, Marty.

[4-7]

what does this mean for the interested consumer on the sidelines who has considered Satellite radio ? I am attracted to the premise but the 300$ ipod-like device for listening and recording content was a little off-putting.

[Sandy Underpants]

Kinda gay to pay to listen to the radio. I get XM through DirecTV which is a wholenether rip off, but hopefully I can actually get to listen to Howard Stern again when this deal becomes complete.

[David K.]

hmm, one single monolothic provider, that will work well for innovation and customer service...

[Jay Johnson]

Call me the king of the free-market, competition driven fanboys, but I think this is ultimately a pretty good idea. I don't think that the competition, such as it was, between Sirius and XM was inuring to the great benefit of the populace anyway.

It's not like competition between say DirectTV and Dish Network, where they are each selling the exact same product, just packaged differently, and in differing price tiers.

The satellite radio folks were selling completely different end product that forced consumers to choose not between differing packages of the same stuff, but between choices A & B. Problem was, I wanted half choice A and half of choice B.

End result for me? I decided to not go either way. Now, I might actually go for the satellite radio.

[Mad Max, Esquire]

Satellite radio sucks. It offers four or five formats everyone listens to and a bunch of eclectic formats nobody listens to. It cuts in and out while you are driving. And, unlike terrestrial radio, things like trees and bridges screw it up. The traffic reports aren't any better than what you would get for free on your local radio. And, if your car doesn't come equipped with it, the wires and crap that come with it suck.

Satellite sucks. Might as well let one big company go bankrupt versus two smaller ones.

[Brendan]

Jay, you are the king of the free-market, competition driven fanboys. :)

[Marty West]

Mad Max,

As an avid music listener/lover I have to disagree strongly. My subscription to Sirius is the best $13 I spend every month. This merger can only mean good things for satellite radio as we know it. Terrestrial radio is dying.

[Jomo]

And, if your car doesn't come equipped with it, the wires and crap that come with it suck

ROFLMAO!!!

[Andrew]

Satellite radio will never become as ubiquitous and profitable as it can be unless this merger is allowed to go through. In the short term, this means fewer satellite orders for Boeing, but long term, this was probably necessary for satellite radio's long-term prospects. I think Dish and DirecTV need to merge, too, in order to better compete with cable and FiOS-type services.

[Sean]

Andy's right, Dave. (That's right. I'm giving you both nicknames that you don't actually use, and taking longer to explain it than the extra few letters it would take. Why? Because I can.) It's either one satellite radio company or none at all.

And free market means they shouldn't have needed any court's approval. This is a luxury item, not a necessity, so why oh why oh why do we need it regulated? You want innovation? Back off.

[Angrier and Angrier]

Terrestrial radio is dying, but satellite radio is a really costly alternative (more costly from an operational standpoint than from a subscription standpoint). Ultimately terrestrial radio is going to be replaced by HD radio and Internet radio delivered through Wi-Fi. Both of these delivery systems are less costly to maintain than satellite radio and both will ultimately deliver a better product in terms of both quality and variety.

[Marty West]

A+A,

Satellite radio already steams in 128kbps. I'd be willing to bet you couldn't tell the difference between a 128kbps stream vs. a 256kbps stream. HD receivers are also expensive and still subject to FCC bullshit regulations.

The variety offered by satellite is pretty awesome too.

I agree with you though...it's not cheap to launch a satellite but they already have multiple satellites in place.

[Angrier and Angrier]

Marty-

The problem with satellite radio is that it costs billions of dollars to launch the satellites - debt that will be hanging over the companies for years. And, unlike a radio station that might spend millions on buildings, the satellite is not a long-term asset that gains value over time. The satellite has minimal value to anyone outside of XM or Sirius. On top of it, the satellites will all eventually burn up, so not only do the companies own multi-billion dollar liabilities that are diminishing to zero value over time, the companies are going to have to replace these satellites at some point by spending billions more.

....For radio, one of the lowest-net advertising vehicles out there.

I think fundamentally the satellite radio business model is flawed and that the technology will soon be overtaken by cheaper, better technology here on Earth.

[Marty West]

A+A,

The newer satellites that will be launched won't decrease in value as much as you might think. Plus Sirius does not own the single satellite...the majority of them are shared with XM, DirectTV, Dish Network, etc. As more and more companies follow this business model the cost will come down to launch the satellites.

Radio advertising revenues will go up to with more and more cars being outfitted with satellite radio right off the production line.

[David K.]

Seany, do you mind if I call you Seany? Good good, glad we cleared that up. Did I saw anywhere that I thought they SHOULD have to get the courts approval? Checking back, i'm pretty sure, nope, i never did. Instead I said that this situation would likely be bad for customers. Others have offered their explanations why they think it will be good for customers, no problem there, Jay makes a great point in fact. You on the other hand come off as some bitter Libertarian fanboy.

[Angrier and Angrier]

Marty-

Not sure where you got your information. Sounds to me like they not only own them, but that two of XM's are about to fail in the next year or so...

http://en.wikipedia.org/wiki/Sirius_radio#Sirius.27_satellites

http://en.wikipedia.org/wiki/Xm_radio#Technology

[Andrew]

The recurring costs for building satellites and launching them is not as onerous as you are making it out to be, A&A. The problem is, it doesn't leave a lot of margin for failures and errors. Most satellites will last for approximately 7-10 years, and XM, Sirius, DirecTV et al obviously have this recurring expenditure pattern built into their business models, so it's no surprise. I bet they even get to depreciate the satellites on their tax returns.

[Angrier and Angrier]

Andrew-

In the case of XM, they had to build and launch a total of four satellites because the first two have problems that have shortened their lifespans.

Considering neither XM nor Sirius have turned a profit after 10 years makes me think that their business models aren't very good. Even if they someday do become profitable, they will never have the earnings growth you have seen with similar technology companies.