XM / Sirius Satellite Radio merger is a done deal?
 

At least so says the New York Post:

http://www.nypost.com/seven/02192007...ter_lauria.htm

Woo-hoo!

Oh wait, this is somehow going to cost me more a month, isn't it?

Holy moly, this is quite interesting!

I thought, though, that the FCC (or was it FTC) was going to block the merger?

/tk

I wonder what'll happen to those of us who have nice long subscriptions..

I can't imagine they'd hike the rates. They are still competing with a "free" format.

The FTC/DOJ (more likely the DOJ) and FCC would certainly take a long, hard look at the deal. The question really boils down to whether there is a separate market for "satellite radio" or the market includes "satellite" and "terrestial" radio.

If I recall in the failed satellite TV merger, the FCC and DOJ defined the market as including only cable and satellite. It was some sort of mult-channel distribution market definition that excluded terrestrial TV. They also found that, for certain consumers, satellite TV was there only option and, therefore, there would be a merger-to-monopoly for those customers and for the others (who had access to cable) it would lead to a duopoloy.

I am not sure the same analysis would apply to radio, since pretty much anyone get can terrestrial radio anywhere and there are multiple providers of it (as opposed to just one cable company). It'll certainly be interesting.

This area of the law is foreign to me. Can you "force" two companies of an emerging technology to remain separate, yet operate in the red? It would seem to me that we would benefit from having one solid company to provide a service we otherwise would not have, even if it costs us more. In some respects, that's a "choice" for us to make in and of itself. Since you can get talk radio and hip-hop and sports programming and classic rock on local free stations, it doesn't seem necessary to require more than 1 company to provide a type of radio broadcast that companies are not jumping at the opportunity to provide at this point in time. I realize the merger would make it that much more difficult in the future for a new company to compete, but then again, I could see regional providers making inroads years down the line, much like in the airline industry.

Are there any smaller satellite providers - I don't know of any?

I wonder what this means for the long-proposed and long-awaited "generic" satellite radio receiver, which could be used for either XM or Sirius (or some other future provider).

I'm happy about the merger, so long as there isn't any major house cleaning talent-wise (O&A, Howard, Oprah, etc).

The possibility of being able to listen to every MLB and NFL game is pretty cool, however.

The short answer to the question is "yes", the government can "force" two companies to remain separate if they find that there will be a "substantial lessening of competition" in a relevant market. That's sort of the basic threshold test, but it's vague and there are a host of arguments to be made. One recognized one being the "failing firm" defense, in which you argue that, but for the merger one of the two companies would go out of business, so the competitive impact of the merger would be same as a non-merger (one company left, instead of two), but there are benefits to consumers if you allow the merger to go ahead as opposed to just letting one of the companies die off and all of their investments go to waste.

Yeah, that's what I was getting at. I think that's a strong argument to make here, where it seems like this sub-industry is benefitting us by providing an advanced-technology service that isn't readily available and isn't yet conducive to full-scale market participation anyway.

Well put me down as somebody who bought Sirius for its content and had zero interest in XM. (I am certain there are people who have the exact opposite view) I hope the merger doesn't change either offering too much or they may lose a customer to the MP3 route.

As somebody who bought XM stock at the worst possible time ($25 a share) I do look forward to seeing what happens tommorow. Of course the holiday gives the government a day to make their announcement and actually send the stock spiraling down again.

I read the original post as NY Times and now that I reread the post I see it was written by the National Enquirer of newspapers. We should end the discussion until a legit news source actually confirms this story.

There are all sorts of discussions and articles about this, but I assume they are all based on the original report. But if Forbes and respected analysts are discussing it, I don't see why we shouldn't.

I don't mind the discussion, it's interesting. I am just questioning the "done deal" coming from the NY post. Analysists have been discussing this merger for months, even years, but the FCC has always said it aint gonna happen. I want to know what new information the Post has that makes this deal done. It it happens today I will eat my words, but I have seen plenty of NY Post "exclusives" fizzle in the wind.

Howard will clear this all up tomorrow.

I think he's off this week.

bah, thought it was just today

I would actually be more inclined to get sat. radio if the merger goes through. I like the sports content of XM for the baseball games, but Sirius is better for college sports. Not getting both has made me less likely to get either one. Plus, I don't really drive that much.

You are not at all concerned about price?

Something tells me I will be paying at least $25.00 a month this time next year for the same service I have now with XM.

Price will be an issue, but if you wanted all of the programming from both right now, how much would you be paying?

Maybe they'll compromise and have some sort of "tiered" packages like cable/satellite providers do now, where you only pay $15 a month for the XM block, etc. Then you'd have to choose whether you want football or baseball, or whether to have it all and pay more. But at least that way, you'd get a choice.

Technology-wise, I wonder how this would work with existing receivers?

hmmmm..
If you had a lifetime sirius subscription and we are to believe the company will emerge under XM trade name, I wonder what that means for your $299 lifetime deal...

I had a sirius lifetime and then bought xm and pay for it just because I liek there offering better. If I could somehow now get XM's channels and be free for eternity or 2100 (like original "contract" actually said) that would kick AZZZZ

You could already get both XM and Sirius for a combined $25/month - who's going to pay that with largely redundant content? The industry isn't doing too great, this seems like a desperation move.

It's really weird to think of Howard Stern promoting "XM radio", if that's indeed the trade name that emerges. I wonder if he has anything in his contract what Sirius agrees to in that regard.

As long as Riley Martin and Bigfoot are retained I don't care.

The problem is, though, that if they end up cutting a number of similar/same channels, they still have the specific channels that will be added together. If you have both XM and Sirius today, chances are you aren't paying $25 combined for 2 versions of ESPNews. You're paying for Stern, Anthony and Opie, MLB, NFL, college football/basketball, Oprah (haha), etc. So to get all of that in one place it's not inconceivable that they could still try to command the same price.

From the music perspective, it will be interesting to see how they marry up the channels. There are channels that have similar content/genres/audiences, but target them slightly differently. It will be disappointing to see some of those x-ed out as opposed to combined.

Shade 45 isn't going down without a fight. There will be drive bys.

Could it happen? Perhaps.
But not without a change in the FCC rules put in place when the original licenses were issued, as they specifically state that the two licenses cannot be held by a single entity.

The FCC chairman is already on record as opposing the merger on those grounds, although there could always be an end run around the rules via Justice Department approval (argued on the basis that they don't compete with each other as much as with all other forms of delivery) or through a change in the existing rules.

But one or the other has to happen otherwise this cannot legally amount to anything except talk.

edit to add: One interesting possibility is that if the argument is made that satellite competes more with broadcast than with each other, then it seems logical that they would have to accept the same regulations that broadcast operates under, including content regulation. In that scenario, if that's the tradeoff, then I could see approval coming very quickly.

Yeah, I just picked up a MyFi portable receiver for XM the other day...I hope it will still work.

SIRIUS and XM to Combine in $13 Billion Merger of Equals
Provides Consumers with Enhanced Content, Greater Choices and Accelerated Technological Innovation

Enables Satellite Radio to Better Compete in Rapidly Evolving Audio Entertainment Industry

Extraordinary Value Creation for Shareholders

Mel Karmazin to Serve as Chief Executive Officer and Gary Parsons to Serve as Chairman of Combined Company

WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- XM Satellite Radio (NASDAQ: XMSR) and SIRIUS Satellite Radio (NASDAQ: SIRI) today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company. The new company's board of directors will consist of 12 directors, including Messrs. Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the Chief Executive Officer of XM, will continue in his current role until the anticipated close of the merger.

The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters location prior to closing.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts' consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:

* Greater Programming and Content Choices -- The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings.

* Accelerated Technological Innovation -- The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment.

* Benefits to OEM and Retail Partners -- The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively.

* Enhanced Financial Performance -- This transaction will enhance the
long-term financial success of satellite radio by allowing the combined
company to better manage its costs through sales and marketing and
subscriber acquisition efficiencies, satellite fleet synergies, combined
R&D and other benefits from economies of scale. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion.

* More Competitive Audio Entertainment Provider -- The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers' attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. In addition to existing competition
from free "over-the-air" AM and FM radio as well as iPods and mobile
phone streaming, satellite radio will face new challenges from the rapid
growth of HD Radio, Internet radio and next generation wireless
technologies."We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on SIRIUS and XM's complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.

SIRIUS's financial advisor on the transaction is Morgan Stanley and Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal counsel. XM's financial advisor on the transaction is J.P. Morgan Securities Inc. and Skadden Arps, Slate, Meagher & Flom LLP; Jones Day; and Latham & Watkins LLP are acting as legal counsel.

Conference Call and Webcast Information

The companies will hold a joint conference call and webcast on Tuesday, February 20, 2007 at 8:30 AM ET to discuss this announcement. The conference call can be monitored by dialing 800-573-4840 within the U.S. and 617-224-4326 for all other locations, passcode 29490052. The webcast can be accessed at http://www.sirius.com/ and http://www.xmradio.com/ as well as on their satellite radio services by tuning to SIRIUS channel 122 and XM channel 200. The webcast will be archived at http://www.sirius.com/ and http://www.xmradio.com/.

About SIRIUS

SIRIUS, "The Best Radio on Radio," delivers more than 130 channels of the best programming in all of radio. SIRIUS is the original and only home of 100% commercial free music channels in satellite radio, offering 69 music channels. SIRIUS also delivers 65 channels of sports, news, talk, entertainment, traffic, weather and data. SIRIUS is the Official Satellite Radio Partner of the NFL, NASCAR, NBA and NHL, and broadcasts live play-by-play games of the NFL, NBA and NHL, as well as live NASCAR races. All SIRIUS programming is available for a monthly subscription fee of only $12.95.

SIRIUS Internet Radio (SIR) is a CD-quality, Internet-only version of the SIRIUS radio service, without the use of a radio, for the monthly subscription fee of $12.95. SIR delivers more than 75 channels of talk, entertainment, sports, and 100% commercial free music.

SIRIUS products for the car, truck, home, RV and boat are available in more than 25,000 retail locations, including Best Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack and at http://shop.sirius.com/.

SIRIUS radios are offered in vehicles from Audi, Bentley, BMW, Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep®, Land Rover, Lexus, Lincoln, Mercury, Maybach, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Rolls Royce, Scion, Toyota, Volkswagen, and Volvo. Hertz also offers SIRIUS in its rental cars at major locations around the country.

Click on http://www.sirius.com/ to listen to SIRIUS live, or to purchase a SIRIUS radio and subscription.

About XM

XM (NASDAQ: XMSR) is America's number one satellite radio company with more than 7.6 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, Chicago, the Country Music Hall of Fame in Nashville, Toronto and Montreal, XM's 2007 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music, premier sports, news, talk radio, comedy, children's and entertainment programming; and the most advanced traffic and weather information.

XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota is available in 140 different vehicle models for 2007. XM's industry-leading products are available at consumer electronics retailers nationwide. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com/.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., including potential synergies and cost savings and the timing thereof, future financial and operating results, the combined company's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," or words of similar meaning. Such forward- looking statements are based upon the current beliefs and expectations of SIRIUS' and XM's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of SIRIUS and XM. Actual results may differ materially from the results anticipated in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statement: general business and economic conditions; the performance of financial markets and interest rates; the ability to obtain governmental approvals of the transaction on a timely basis; the failure of SIRIUS and XM shareholders to approve the transaction; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of SIRIUS and XM may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; and operating costs and business disruption following the merger, including adverse effects on employee retention and on our business relationships with third parties, including manufacturers of radios, retailers, automakers and programming providers. Additional factors that could cause SIRIUS' and XM's results to differ materially from those described in the forward-looking statements can be found in SIRIUS' and XM's Annual Reports on Form 10-K for the year ended December 31, 2005, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 which are filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov/). The information set forth herein speaks only as of the date hereof, and Sirius and XM disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release.

Important Additional Information Will be Filed with the SEC

This communication is being made in respect of the proposed business combination involving SIRIUS and XM. In connection with the proposed transaction, SIRIUS plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS and XM plan to file with the SEC other documents regarding the proposed transaction. The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of SIRIUS and XM. INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC by SIRIUS and XM through the web site maintained by the SEC at http://www.sec.gov/. Free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to Sirius Satellite Radio Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention: Investor Relations or by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place, NE Washington, DC 20002, Attention: Investor Relations.

SIRIUS, XM and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding SIRIUS' directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2005, which was filed with the SEC on March 13, 2006, and its proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on April 21, 2006, and information regarding XM's directors and executive officers is available in XM's Annual Report on Form 10-K, for the year ended December 31, 2005, which was filed with the SEC on March 3, 2006 and its proxy statement for its 2006 annual meeting of shareholders, which was filed with the SEC on April 25, 2006. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available.

Contacts

The "a la carte" offering could be worrisome, since critics have called out cable/satellite TV companies for suggesting the same thing. If we can't get the same number/variety of channels "a la carte" as we can now, then we are going to get screwed. I bet they offer a basic plan that includes most of the music and talk/news stations, but then we'll have to pay extra for the MLB/NFL/NHL/Stern/A&O, etc., channels. So even if you want to duplicate what you currently have, it will cost more. That's my guess.

Yeah, I don't like this.

I would be very cool with this idea. I think I may be one of the few satellite radio subscribers who listens to 100% music. My only motivation for getting Sirius was how shitty St. Louis (insert any city is my guess) radio had gotten and the MP3 solution had nowhere near the variety XM and Sirius offer. I could care less about NFL (I get Sunday Ticket and watch the games), Stern, MLB, playoby, Maxim, etc. However if my music package ends up being the price I am currently paying for everything right now than I will be a little annoyed.

I'm quite curious how this is going to play out, practically my whole family has Sirius.....

yeah, that troubled me a lot too.

I used to want this (without giving it much thought) only because I wanted Sirius to get the punk channel that XM has (which they are getting one in April anyway now so it doesn't matter). But now that it is real and right in front of me, I don't like this one bit. I don't see how it is really going to be much of a good thing for us consumers because you know somehow we are going to have to end up paying more to at least get the same content we get now. I really enjoy Stern and the NFL channel (they are probably my most listened to) and the thought of having to add them like I would a movie channel on cable really pisses me off. I just don't know yet how this could end well.

edit: I wanted to add that I am not trying to jump to conclusions or anything because there are so little facts out right now. I think that like I said, now that sirius is getting a punk channel, XM has nothing that I want. I only really follow the NFL, I don't like O & A, no to Oprah, and most things already have an equivalent on Sirius. So I guess, for myself at least, I don't currently see any benefits.

I wonder how well this will work, if true. I mean, XM tried to offer pay channels (A&O and Playboy), but it flopped and they changed to free (well, A&O anyway). So, they already know that this model likely won't work, unless they're banking on people wanting sports and Stern so badly they're willing to pay for it.

I'm also hoping the rumors about the need to upgrade receivers is just that. I have a built-in receiver in my car and will be damned if I am going to buy a new unit that I have to stick on my dash.

WOOHOO I hung onto my sirius stock!!!! Cant wait for tomorrow!!!

huh?

What does this mean for my Sirius shares?


and

You'll be even more annoyed if the merged company uses the new XM model of commercials on most of their music channels.

As long as I can use my current receiver, I'm fine with this deal. If not, I will be very annoyed. The "a la carte" aspect is only mildly concerning to me at this point.

My thought exactly, except I have XM basically for MLB coverage. I always wanted the NFL too and thought it'd be cool if XM and Sirius merged together, but not if I have to pay more just to get MLB games. It'd be great if they let us keep whatever package we have now and have the rest be a premium package but that probably won't happen. I really hope they don't offer a basic package and then charge current XM subscribers more for MLB and current Sirius subscribers more for NFL. Add in the whole having to change receivers and this could be the worst thing for us.

It looks like we'd be looking at least a year and half until this is all sorted out.

As long as I can keep my Roady XT receiver and add Howard Stern to my current XM service I don't care what happens.

WTF are you talking about? XM has more commercial-free music channels than Sirius does. XM also carries a few channels (3 or 4 tops) per their agreement with Clear Channel which have commercials on them. So while XM doesn't have 100% commercial-free music, they offer more commercial-free music than Sirius does.

I guess this could be cool.
I got XM originally because it had ESPNRadio and ACC Coverage. Since getting it I've fallen in love with BPM and the 2 explicit comedy channels, and I'd be lying if I said I didn't use the MLB. As long as I can keep these, I'm totally fine with the merger. ;) :D

/tk

I think he was refering to the XM channels, you know how they advrtise for each other 3 times per hour while new playlists are added.

When I had Sirius I never heard this.

I.E. your listening to a top 40 channel and they tell you about their country, or O&A or whatever channel

I was mistaken. In which case, I have to wonder whether the revenue coming from commercial advertising on 3 or 4 stations (that presumably no one would listen to), is worth the bad press (even if exaggerated) of being less than 100% commercial free. After all, it's the people that don't have XM (potential customers) who are going to misunderstand this impact.

Not *that* strange...he's done it before...;)

hxxp://afro202.com/archives/XM-Foundry/04132005_howie_endorses_xm.mp3

Wait a second....

Hasn't Dish Network and DirecTV already tried this? I think the SEC was VERY clear on those merger implications before they shot it down. I don't really see how this is much different.

Also, I think the FCC has quite a bit of pull within the SEC - basically dictating to them how to handle the terrestrial radio mergers on the 90s - and they are going to be dead-set against any XM/Sirius merger, so I'm not convinced this is going to happen any time soon.

I think the best reasoning for why this will go through is...these companies will eventually die if it doesn't happen. There's way too much money being lost for the format to survive the way it's constructed now.

In fairness to XM, they aren't carrying the ads for the revenue they generate, they're carrying the ads because they are contractually obligated to Clear Channel to do so. Part of the deal that saw CC invest in XM included them (CC) providing programming for several channels & in return CC had the right to sell commercial time on those channels.

XM needed the money from CC, while CC was hedging their bet on the future of broadcast ever so slightly by investing and getting a chance to experiment with the medium a little bit. By all accounts I hear, both sides will be happy enough to see their contractual agreement come to an end, as the negative press wasn't something XM wanted & CC never really managed to generate any significant revenue from their channels

(Wanna advertise? You can for as little as $30 a spot & about as many spots as you want. To put that in perspective, $30 is less than it costs to run a spot 7p-12a on the Modern Rock station Huntsville, Alabma)

Honestly, I wouldn't even care if they offered a reasonable amount of commercials in any of the music channels, but I would hope that they would lower the rates if they were going to switch to that type of financial model. Commercial free doesn't matter as much to me as having a wide variety of choices, and good reception.

I don't care at all about commercials. I tend to use my satellite radio the same way I use the TV - when a commercial comes on, I can choose from 1 of the other 200 channels to listen to. I rarely if ever hear a single XM commercial. And with some channels, I know the general format of the show and avoid certain times when I know commercials are likely to be going (especially ESPN and Comedy Channel).

About the only other thing I have to watch is surfing the uncensored channels. Saturday I came close to letting the young ones hear "FORTY FUCKING TWO!" as I surfed past Liquid Metal. It was a close call. I would have been meat.

You guys have to be kidding about the commericials. This is the only reason I have satelitte radio. The only one.

The commercials don't bother me at all either. I listen to about 8-10 channels primarily. If a commercial comes on one that I'm listening to, I switch to another. I never hear commercials. The main benefit of satelitte for me is choice of programming and always having clear reception.

I hope this means I will be able to listen to Tony Stewart's show on Sirius.

Commercial free is a big deal to me. It's the main reason I can't listen to free radio anymore. This is nothing more frustrating than changing the channel 5 times only to have commercials on every channel.

Additionally, all of the non-music formats on XM run commercials sold by XM. I don't know how much money they generate, but I'm sure it wasn't insignificant.

The XM Kids station used to run commercials, too. Between Justin Roberts and The Imagination Movers, you'd occasionally hear an ad for Trix or Snackables. We complained a bunch - the DJs hated them, too - and eventually managemnt got rid of them.

That's what I was thinking too, but I read an article last night that was saying the satellite merger really fell apart because there are places in the US that satellite was the only real option (no cable and no OTA options). The article was saying that's going to be a much harder case to make for satellite radio because of better coverage of terrestrial radio stations across the country. The same article I think mentioned that politically this was much more likely to go through now than if the merger were to take place a year to two from now.

I still wouldn't be surprised if this gets shot down, but I'm definitely no expert. It will be interesting to follow though and see what happens.

FYI, here's the email I received as an XM subscriber:



February 20, 2007


Dear XM Radio Subscriber:

We want to share with you some exciting news: Yesterday, in Washington DC, we announced XM Radio will be merging with Sirius Satellite Radio to form the premier digital audio service.

The merger will create a satellite radio company that will provide consumers across the country with more and better premium radio programming. The combined company will be able to compete better in what has become a very complex and dynamic entertainment market.

Where today our exclusive contracts mean you had to choose between baseball and football or Oprah and Martha Stewart, the new company will seek to ensure that in the future, you will be able to access both companies' programming. And, once we are fully integrated, those of you who have factory-installed satellite radio will no longer be limited to the programming provided by the exclusive satellite radio service chosen by their car manufacturer.

This merger should be completed in late 2007 or early in 2008. Throughout the year, we will provide updates on how the merger is progressing and information will be available at our website, www.xmradio.com.

Between today and the merger date, as well as during the period immediately after the merger date, all of your services will remain the same. The channel lineup, the customer service number, the great music technology, and the XM Radio web site will all remain unchanged and there will be no disruption to service. But, if you have questions, information will be available and maintained on our website, and you can contact our Listener Care team at 800-XMRADIO, with questions and concerns.

XM Radio continues to be committed to providing you the highest quality audio entertainment and customer service available today. After the merger, our new company will be able to offer you the most exciting listening experience in radio.

Sincerely,

Hugh Panero
CEO, XM Satellite Radio

Given that Hugh is getting kicked to the curb, dontcha thing they could have gotten someone relevant to write a letter to the subscribers?

Even if/when the merger bombs, he's certainly out of a job.

Actually, it almost certainly was insignificant. It wasn't meant to be, but that's how it turned out.

From day one, there have been problems getting the ads to sell at any meaningful price because the relatively low number of listeners on any given channel at a time. And when you're bleeding money at the pace the satellite companies have, it takes a pretty good chunk of change to become "significant".

Word. I can't imagine ever subscribing unless it was commercial free.

Interesting stats coming from the first Arbitron ratings to include satellite radio listening.

Press release yesterday on the first set of data included the following tidbits:
-- The sum all of listening reported to the 297 channels that received a mention amounted to 3.4% of all listening
-- Highest reported AQH for any channel was 0.2 percent, average for all channels mentioned was 0.009 percent
-- Roughly 5.6% of all diarykeepers reported listening to satellite at some point
-- While satellite listeners are heavier than average users of radio
(33 hours/wk versus 19/week for non-satellite), their reported listening showed more AM/FM use (14 hours) than satellite (10.75 hours) or internet (8.25)

Individual channel data was not released as the system is still being adjusted to accomodate that information.

I would think a stat like this is slam-dunk proof that a merged XM/Sirius wouldn't be a monopoly.

{shrug} Goes back to the question of what's being monopolized - satellite radio or radio et al.

And as I mentioned before, if they're considered part of the latter, then would have to be a strong look at making them subject to same/similar regulations to the former, otherwise the government is unbalancing the playing field.

What regulations are you referring to? I always thought satellite radio had similar regulations with a few differences like cable tv vs network tv.

The most obvious thing that comes to mind is content, which has been largely unregulated for satellite radio.

I'm not against the merger per se, but if they want to avoid monopoly regulations by saying that they're "radio" instead of "satellite radio" then I strongly believe they should play under the same rules.

(and just FTR, that's a consistent belief for me, I feel the same way about cable/broadcast TV)

ok thanks for the clarification. I don't necessarily agree they should have the same content regulations to be considered a direct competitor, but my gut feeling is they will have a hard road ahead to get this merger through.

A few things to say on this in regard to other posts in this thread. I am a little slow on this because I was on the road.

So listening to Sirius on the road got me some information, the big stuff came mostly from Mel Karmizin when he was on Howard Stern. First off, Karmizin said prices will not go up, that would be counter subscriber growth. He even told Congress on Wed. that he would agree to a price cap. The merger is good for consumers, because they wouldn't feel they have to choose between two different services that offer two different things (mainly when it comes to sports, and then some talk shows). I agree with this. I would love to get baseball, but I won't give up what Sirius gives me to get XM for baseball.

He also said that they would remain commercial free on the music channels I believe, but that the talk would still have it as they do now on both XM and Sirius. (Talk shows pretty much NEED to have breaks, for the people talking and producing the show anyways)

As for Opie and Anthony, it was pretty much made clear that they would be gone when their contract was up, unless they decided to go exclusively satellite.

The arguement for if it is a monopoly is a good one in my opinion, but I am no expert. He argues that Satellite radio is not only in competition with regular radio, but also MP3 players and internet radio. I can buy that, and in that case I can see how they also wouldn't need to be censored as regular radio as JimG talks about. That is the sales pitch anyways, who knows if the government will buy it all....

Someone else who brought up something interesting was Martine Rothblatt, who is considered the inventor of satellite radio I guess. She used to be a he actually, and also invented the system that tracks my work life (commercial vehicles) and started a company that cured his/her daughters life theatening illness. Anyways, he said that satellite radio was meant to be on a certain frequency, and that when Sirius was started the government thought there should be atleast two companies so they split that frequency. The merger would actually allow the new company the full frequency, which would improve satellite radio....another positive for consumers. One of the things that this will make easier is for video to be sent over the satellites, straight into peoples cars. Pretty cool stuff.

Not really news, more propaganda supporting the merger, I suppose. Anyone heard anything about the merger recently?




Merged satellite radio companies would offer channel choice

July 23, 2007 (WASHINGTON) - The top executives at the nation's two satellite radio companies detailed pricing plans Monday that they said would let customers choose which channels they want to receive if the two firms are permitted to merge.

XM Satellite Radio and Sirius Satellite Radio announced the $4.7 billion merger last February. The combination requires approval from antitrust regulators and the Federal Communications Commission.

The pricing plans announced Monday range from $6.99 per month for 50 channels offered by one service to $16.99 per month where customers would keep their existing service, plus "chose from the best" of channels offered by the other service.

That means a customer could subscribe to both the Major League Baseball channel on XM and the National Football League channel offered by Sirius, on the same radio.

Currently, the price of a monthly subscription for both companies is $12.95 and there is no channel choice, or "a la carte" option.

A combination of Sirius and XM, which broadcast to a combined 14 million subscribers, faces steep regulatory challenges, however. When the companies received their licenses from the FCC to begin offering subscription radio service via satellite, they agreed not to merge.

The companies must prove to the Justice Department that the deal is not anticompetitive. They must also prove to the FCC that a merger would be in the best interest of the public, which owns the airwaves the two companies use to deliver their signals.

Sirius CEO Mel Karmazin, in a speech at the National Press Club in Washington on Monday, said the U.S. is in a "revolutionary age of audio entertainment" and that the companies must compete with a whole range of products that weren't around when the licenses were first issued.

He said the companies compete with free services, including portable digital music players, cell phones that download music, digital radio and the "800-pound gorilla" that is terrestrial radio.

The National Association of Broadcasters opposes the merger, calling it a "government-sanctioned monopoly."

Spokesman Dennis Wharton said in a written statement that policymakers "should not be hoodwinked" by the announcement. He said the "a la carte" option would require customers to buy new radios and he said that nothing in the past has prevented either company from offering an a la carte option before.

Karmazin noted that the NAB itself claims satellite radio is a competitor when it lobbies the FCC to loosen limits on radio station ownership. He said the NAB is "not just in conflict with us, they are in conflict with themselves."

Karmazin said savings to be realized with a merger would amount to "hundreds of millions of dollars per year" thanks to a drop in expenses. Such a savings is what would make the "a la carte" packages possible.

He noted that Sirius has never turned a profit in its 17-year history and lost $1 billion last year, but insisted if the proposed merger does not go through, nothing will change.

"I believe both companies will be able to compete in a robust market," he said.

If a merger is approved, the combined company would offer a total of eight different packages.

The lowest-priced "a la carte" package would offer 50 stations from one service for $6.99 per month, plus additional non-premium stations within the service at 25 cents apiece. Premium programming, however, like professional sports and the Howard Stern show, would cost $5 or $6 more.

A second "a la carte" plan would let customers tune in to 100 channels, mostly from one service, plus a handful of "best of" channels on the other service, for $14.99.

Both the a la carte packages would require the purchase of a new radio, the companies said.

Other packages would include family friendly lineups, a music package and a news talk package, both for $9.99. Customers happy with their existing service would still pay $12.95 per month.

Consumer groups have opposed the merger.

Chris Murray, senior counsel at Consumers Union, the nonprofit publisher of "Consumer Reports" magazine, called the announcement an "interesting positive development." However, he said, the merger of the two companies would still result in a monopoly, which would ultimately be bad for consumers.

Sirius and XM hope to close the deal by the end of the year.

I thought one of the key phrases in the whole announcement today was the bit about "A la carte programming will only be available for subscribers using new radios, which will be developed following approval of the merger."

In other words, we'll give it to you cheaper in the long run if you'll just give us some quick cash up front.

I saw on SatNews, I think this morninig, that Cardinal Egan (of New York) wrote an opinion piece in the NY Post about how he supports the merger.

I think it was also there that I read that when they seek public comment, the FCC is usually leaning towards approving things. I don't recall when the public comment period closes, though.

/tk

i firmly believe satellite radio is worth about $7, as opposed to the $12 i currently pay. the sound quality is poor, reception is not satisfactory, a handful of stations play commercials (on XM) and overall i want more selections than is currently given. lots of channels, yes, but not lots of stuff i would listen to.

$7 month for hopefully better quality sound and choosing 50 channels (i don't even like more than 20 channels on XM, but the 5 stations i do like i really love) is a deal for me. i don't listen to sports on the radio so i'd be happy not to pay for something i didn't use. XM should be charging $7 a month right now anyway and they'd see subscribers increase. they shouldn't have had 2 companies to begin with, a fledgling medium first needs to show it's viable and a good enough alternative, then you can branch off into separate companies with different options (why should i choose between XM with MLB or Sirius with NBA/NFL? give me both, make me convert and then screw me over afterwards, after i've got used to being a satellite customer). you also have to give people a good reason to pay for something they can get for free. satellite radio got a little too ahead of itself and now it seems to want to go back to how it should have been all along.

There's always the option to not pay, and listen to normal radio for free.

I am very happy with the selection Sirius offers. The Howard Stern lineup is great and I think the music choices are very good. It is much better than anything I can hear on terrestrial radio. I have no problem paying $12 a month for the service. I originally signed up for Stern. When he leaves radio, I will keep Sirius. I could never go back to listening to the music choices on free radio.

I am not happy with the merge and do not think I will pay $16 for Sirius and some XM channels. The only thing XM has which I would listen to is MLB. But baseball is a regional sport and I can listen to my teams on AM.

The only way I'll be happy with the merger is if I can avoid getting a new head unit for my car. My (new) car came equipped with Sirius, and I've been slacking (just haven't had time to do it) on taking out the head unit and replacing it with an XM unit. I, however, am an XM subscriber, so this causes problems for my XM listening (right now I'm using a Delphi SkyFi2 which I hate).

I went with XM for baseball. Unfortunately, I'm a Red Sox fan and I live in the DC area so unless they're playing the O's or the Nats (interleague), the only way I can get Boston games is through XM. If I can keep my current lineup of channels (the XM lineup that is) and not change my head unit, mega bonus for me. If I can't change my head unit...well, it's really no different than where I was when I bought the car, needing to do so.

/tk

I'm sure, like most things, my experience/preference is completely different than most, but my feeling is that I do not care about having portable satellite radio, nor do I care about having it in the house, and the only way I'll have it in the car is if the car comes equipped with it. I'm not replacing the pre-installed stereo unit. I seriously considered getting a separate unit for my wife's van, but after looking at the cost, the size of the unit, the issues I've read about getting good reception basically mandating that someone install it directly into the radio wiring, and the problem of finding a place to put it on the dash that is convenient but not in the way...I couldn't justify paying over $200 for the honor of paying an additional $7 a month. We have an Odyssey, and I couldn't find a single place to put the unit that wouldn't have been in the way of something on the dash, or getting direct air/heat, etc.

Again, I'm not sure if I'm an insignificant minority or what, but I'm past the days when I would tear up my car to put in a good sound system, and I'm WAY past the days when I would have my portable CD player bouncing around on a stand hanging off of my dash (which is what this reminds me of). Unless it comes with the car, I'm simply not interested.

ping: assholes in the DOJ and FCC

Time to wake up already.

The DOJ woke up and cleared the deal today. The merger is still pending FCC clearance.

I heard this a little bit ago, very good news.

The only real way the combined company is going to be able to save money is to drastically cut down the workforce. That's probably going to mean that many many people at XM will be losing their jobs, including most of the on-air talent - since Mel would be foolish not to keep his own guys in place.

That would mean the gang at XM Kids losing their jobs, and that makes me very sad.

That's what I'm a bit worried about. I like Liquid Metal, Da Boneyard, and XM's uncensored comedy channel. Does Sirius have anything like these? I'm hoping they keep the channels from each that would fill holes in each other's programming, but I assume that one set of similar channels will be shut down.

Sirius has the same stuff.

I am sure that's the plan. They will pick and choose among the best channels of each and make sure they have all their bases covered. Obviously there will be some overlap and some of those shows will get cut. A lot of the cost savings will also be through reductions in work force unrelated to what's on the air (e.g., sales people, technicians, execs, etc.)

It will be interesting to see what they do pricing wise. On one hand, they can't just raise prices willy-nilly. The DOJ can come back and bring suit forcing the companies to unwind the deal. (FTC recently won a suit against two hospitals that merged in Chicago a few years ago. They initially cleared the transaction, the combined hospital rose prices, and the FTC swooped in and brought suit. The hospitals did not end up getting split, but there were some remedies enforced.)

That said, the new XM/Sirius will be offering a product that has a lot more programming than either did individually. One would have to think that the ability to get Howard Stern, Oprah, and all the NBA, NHL, MLB, NFL games would be worth more (and cost more to provide), so some price increase would undoubtedly be justified, if not necessary.

This is from an article I posted above from last July:

"The pricing plans announced Monday range from $6.99 per month for 50 channels offered by one service to $16.99 per month where customers would keep their existing service, plus "chose from the best" of channels offered by the other service."

I assume this means that in order for me to get the NFL, I'll have to pay another $4/month. However, it's interesting that they refer to "50 channels offered by one service" and to "keeping their existing service," which suggests that they would be offering duplicative channels, doesn't it? If this is still on the table, you can't cut the rock channels of one service and only have rock channels of the other. Or, if they do that, then the "choice" is largely illusory, and you've basically got to go with the combined, higher price package to truly get a wide range of channels.

Either way, I think just to cover all the sports, we're going to be paying around $17/month.

I don't have either service. How does the $17/month compare to what you're paying today?

While I am not familiar with the details, I don't think the pay for sports packages idea is a bad way to go. I'd be willing to shell out some extra cash for the NHL and NFL, but I don't think I'd want to spend money on the MLB or NBA.

On either service, the cost is $12.95/month right now.

i'm game for anything that lowers the price. the sound quality is horrendous and going under bridges severely hampers the signal. it's worse than radio which is alarming since satellite is a pay service. some of the pop stations on XM play the same songs on heavy rotation, sometimes at the same time which is not justifiable. XM even has some channels that has commercials. satellite radio has a loooong way to go to compete with radio, let alone ipods. charge less and i'd be happy. for $13 a month i can essentially download 13 songs per month or one album off itunes.

Being able to listen to as much baseball and college football as I want while driving, and getting ESPN Radio and other talk/news stations without loss of signal while driving hundreds of miles across the country, is worth $13/month to me. And I also like the metal/comedy channels, which give me stuff I wouldn't otherwise hear. Aside from that, I really don't listen to any of the other channels.

the sound quality is really good if you use the right setup

transmitting to your fm radio via and unused frequency is the worst option

I can't speak for XM but on Sirius not one music channel has any commericals.

Satellite radio is superior to terrestrial radio. At least Sirius is. Maybe XM is different. Dunno.

I'm paying $8.99/mo. on all my XM subs.

How?

From today's Tom Taylor newsletter (from radio-info.com)

So the DOJ approves XM+Sirius: Now, what conditions will the FCC squeeze out of them?

Yesterday afternoon the Department of Justice issued its opinion – that it won’t try to block the merger of the only two satellite radio licensees. Now the cameras and the floodlights are on the Portals, where the FCC is the last obstacle Mel Karmazin and Gary Parsons must overcome. Unlike the situation at Justice, the FCC has the ability and the inclination to exact changes, in the form of conditions. Sirius boss Mel Karmazin thought he’d gone a million miles in that direction with last year’s pledge to offer the merged service – but only the merged service – with “a la carte” pricing. He knows that Chairman Kevin Martin adores that approach and devoutly wishes he could impose it on the cable industry. But forces both inside the Commission (the highly vocal Commissioner Michael Copps) and outside (including the minority investment firm Georgetown Partners) want more, in exchange for approval. We now know that Georgetown has met with various folks at the FCC literally dozens of times, asking for some kind of set aside for minority programming. We don’t know if it’s proposing that some of the merged company’s equity be shared, or simply that its programming be more diverse. Last week Martin said he’s at the stage of asking his staff to draw up options for XM+Sirius. But that a decision’s unlikely any time here in March. So – XM and Sirius wait. And they lobby. The NAB’s indignation was immediate: “We are astonished the Justice Department would propose granting a monopoly to two companies that systematically broke FCC rules for more than a decade.”

that's what i do - play XM through certain unused radio stations. i'll have to look into this now cuz i'm open to making any improvements.

the potential of satellite radio is great, as is having commercial-free radio and access to a vastly larger selection of music. that is worth paying for. if i can get the sound quality to improve or at least have the signal remain more consistent i'll be happy.

this is the best move for satellite radio. i always said 2 companies vying for the same infant service is too much. they should've focused on getting as many subscribers as possible, then after the model proved to be successful and profitable could you introduce other companies and options. but satellite radio was too young to make people start having to decide between Stern and O&A and NFL and MLB. what if i wanted O&A and NFL (which i did)? i'm really hoping for some creative price plans where i pick and choose which stations i want. that'd be great.

WTF? Is there not enough channels geared toward Native Americans on satellite radio or some other minority? I know it can't be because of a lack of black or hispanic stations......

LOL at mandatory minority programming on a paid subscription radio service.

I used to use the fm transmitter but the static was driving me bonkers. I bought a car tape deck adapter that plugs into the Sirius unit and bingo, perfect reception.

Now if you don't happen to have a tape deck in your car you there are a couple other options(at least on the sirius unit). You can utilize an input port on your stereo if you have one with an adapter a la an mp3 player or you can even wire the thing directly to your radio if one was so inclined to.

Anywho, that eliminates static. Bridges, you'll have to tear them down to fix that one.

Sirius has like 10 rap channels and ESPN Desportes. Does that count?

And Korean News. I'm pretty sure Koreans aren't in the majority over here.

shouldn't they determine, first, if there is a large enough of a minority-base actually paying for satellite radio before they lobby for minority-centric stations? without sounding racist i would readily assume there aren't a lot of minorities paying for satellite radio. this is like demanding there be more stations geared towards WWII vets.

and what do they mean by this anyway - there are stations that play urban music, world music and spanish stations. they must mean they want more minorities in positions of power.

that's an option i'm not taking off the table. my musical enjoyment is more of a priority than mass transport.