Comments on: Who's going to pay for the Sirius-XM merger? How about Howard Stern?

It may be their business, but will the subscribers have to pay for the Sirius-XM merger? Maybe Howard Stern should take a pay cut to help Sirius' bottom line.

[ss_Whiplash]

So I wonder if Steve Guttenburg would willingly take a pay cut if CNet management didn't know how to run run their business?

[ibeetle]

I could not agree more.
I have a funny feeling that as a XM Radio subscriber I am going to have to buy new hardware. Maybe not right away, but within a 12 months to 18 months after the merger is said and done it will probably happen.
Then there will be price increases. Not right away but give it time. It will happen. First it will be small. Only a $1.00 or two. They will tell us that there has not been a price in crease in years so what is a $1.00 extra a month. Then another $2.00. Then premium packages. Want that block of 5 news channels? That will be an extra $1.99 a month. Want a Sport package? Another $1.99. Want NFL games? First you have to get the sports package... then you will have to get the NFL games package... for another $2.99 a month for the NFL season.
Before we know it satellite radio will look like cable television. Paying through the nose to get a few channels we want with terrible sound quality due to over used bandwidth limitations.

[chef255]

ibeetle "i am going to have to buy new hardware"? the point is you don't "have" to do anything. This is a pay service and if you don't like it, don't buy it. It's the free market at work. Go listen to terrestrial radio for free.

[crazynexus]

The sirius/XM merger already has put in place a pricing structure, and if you read it, there's no changes to current subscription. To get your normal package, adn the "best of" of whichever one you dont' have, it'll cost $16 a month. I for one will keep my Sirius package, as it has everyhing I want on it, save MLB. Which will stay $12.95 or whatever a month (I buy the yearly subscription). It's funny that the only people pining for the merger to not be allowed through are the National Assoc. of Broadcasters. Most every analyst thinks it should be allowed to happen. And they ARE competing against terrestrial radio. Many people I know I say "You should get satellite radio, it's the best!" They say "Nah, I'll just channel flip when commercials come on" or "Nah, I'll listen to my ipod in my car." So the DVD to Movie ticket analogy is flawed.... people go to the movies for the experience (you know, 12 speakers on a 50 ft screen vs at home where most people have a 32" TV with no speakers). Apples to oranges.

Plus, the only way the FCC and DOJ is allowing this to go through is because Sirius/XM have promised NOT to raise prices! The money that they'll save comes from cutting their work force, and combining advertising budgets, and not competing against each other.

[i_am_still_wade]

Sirius better not use their own satellites. XM has far FAR better satellites in geo-synchronous orbit: 2 active and 2 backups. Sirius has 3 satellites but not geo-synchronous. Everyone says XM's sound quality is superior even though Sirius has better music channels. Of course, if I'm not happy with the new prices, there will be one less customer.

[bhansen92]

No subscription-based service is immune from price increases. Doesn't matter if it's cable TV, TV Guide, or Sirius or XM. Costs go up so rates go up. Want to avoid rate increases? Do like I did, and like my wife did: buy a Sirius lifetime subscription. One payment and you're done. We've had two lifetime subscriptions since 2001 and they paid for themselves about a year ago. We're living on the equity now.

I've already received written confirmation from the company that the agreement will be honored, so I'm not concerned they'll cancel the deal, and as an attorney, I know how to enforce these things, so I'm not concerned with making them live up to their promises (e.g., about three years ago I forced their VP of Customer Relations to write me a letter on corporate letter head waiving the transfer costs and limitations on the number of transfers because when we bought the "lifetime" subscriptions Sirius did not adequately disclose the fact that the subscription could only be transferred to three successive radios and on the fourth attempt would be cancelled; that letter is safely tucked aware in my fireproof safe).

This is a business. It should be able to explore strategic mergers and acquisitions and provided it receives regulatory approval and consumer support, be allowed to do as it wishes without people trying to tell its talent to give up money for their sake.

[SatRadJunkie]

I don't know where you go the idea they "promised not to raise prices". Even if they had (they haven't), such a "promise" is meaningless. Once the merger is approved they can do whatever they want to, as long as FCC hasn't mandated otherwise. DOJ imposed no restrictions, whatsoever, on the merger.

The "who the compete against" argument is over. DOJ made its decision, it was clearly the wrong one, but consujmers have to live with it.

[crazynexus]

"Sirius CEO Mel Karmazin has also offered to fix prices in order to satisfy regulators and consumers. "

and here's another quote: "Both companies compete primarily with free services. Executives from XM and Sirius both made it clear that they do not want to slow down the adoption of satellite radio, so they hope to not increase the subscriber price, but to gain new revenues from new services: video, navigation, and advertising. "

That is where I got the promised to fix prices. As a condition of the merger, if Sirius were to raise prices, they'd get slapped, hard, by the FCC and have a ton of fines thrown on them. Perhaps reading some more on the actual merger would provide better insight. There is already talk of Sirius TV (I think it might be out, I can't remember) for in the car use. Soooooooo.. how is this BAD? Noone has come forth with a good argument other than "it's bad and they'll raise prices!" They know the instant they raise prices people will start leaving.

[ecyph]

the whole future of this is to have both an Internet based IP broadcast solution as well as a satellite broadcast solution.

I'm sure Howard Stern's paycheck pales in comparison to the gentlemen employed by whichever investment banks are advising both XM and Sirius. And what about the executive teams of both XM and Sirius. I'm quite sure that the fat-cats at GM who hold a majority stake in XM aren't taking a pay-cut on this deal.

Steve, no offense, but your argument sounds like you just don't really like the fact that Howard Stern is a highly paid talent. If you were to calculate the number of subscribers that joined since he was hired, he has more than paid for himself. That's not even counting the advertising dollars that his show generates for the 30 or so minutes that are sold for the 5 hour show. If the management of Sirius keeps spending their money in the wrong ways, why should Howard be the one to pay the price? He isn't responsible for budgeting, marketing, programming, etc. except for his role on his channels. The fact is, he's doing a very respectable job in attracting both talent and listeners in his little "howard stern" world. I'm sorry for XM folks who don't want that, but it's certainly their choice not to have the XM / Sirius service. One can always plug an Ipod into their car, or listen to HD radio, or just plain old FM radio.

He's the flip side of that argument: I can't imagine why I would want to pay for Opie and Anthony, INDY racing, NHL or.... the queen of irritating --- OPRAH! 55 Million Dollar contract? What a waste of money. She isn't even on more than 2-3 times per week. But honestly, I don't care, because the service is just awesome and I will HAPPILY pay up to around 20 bucks a month to not have to listen to commercials and all the **** that commercial terrestrial radio represents.

Anyway, Steve, thou doth protest too much. Let the merger go through, and then at least we'll have 1 satellite radio option instead of none.

[dimebagadam]

he's brought more than enough subscribers to pay his salary and sirius had a net loss of 500 million last year and 1.1 billion the year before. I don't think I'd take that kind of paycut.

[RoaldFalcon]

I am concerned about bigger potential problems than hardware compatibility and price hikes. The worse possible outcome of this deal is that without competition they may start running commercials on their music stations. I HATE commercials, but given the history of these things (cable TV, movie exhibitors, etc.) I fear that they are inevitable.

It hasn't happened yet, and I'm already mad.

[jtklein]

100% I am one of the first 250,000 xm subscribers and the minute I hear a commercial on a musuc channel I`m off life a prom dress!

[bigfatslob]

Bah. This argument is ridiculous, and has already been disproved.

Is this is the Steve Guttenberg who's supposed to understand tech, or the Steve Guttenberg from the Police Academy flicks fearmongering because he's afraid his P.A. DVD residuals might not be enough to cover the fee?

And what is the big deal about buying new hardware? I'm on my 2nd Sirius unit and would probably pick up the Stiletto if I weren't holding out for the post-merger hardware. The things are cheap enough (well, maybe not the Stiletto, but that's far more than just a sat. radio) and the tech improvements alone make a regular upgrade cycle worthwhile. My first unit was the size of a brick, slow to change stations, had no buffer, an ugly orange screen, and got hot enough to warm my hands on a cold day. My current one is the size of a small candy bar phone and can pause and rewind a good half an hour of audio. Newer units will have the kiddie TV output functionality. I wonder if these same people whining about having to upgrade (which is years down the road anyway) are the same ones who whine that they can't run Vista on a Pentium 3.

There's plenty of other choice out there. You could drop $50 a month on a solid unlimited 3G plan and listen to any internet radio you want in car. And if you're cheap and still want your Stern fix, you could always torrent the latest show to your iPod and get it free, just listen to it the next day. It's not like he's not on repeats and best-ofs every other week anyway.

[viewsource]

Wow I don't think I've read a more uninformed article in my life. Does CNet not have an editorial process for fact checking? Yikes.

[bob1960]

Here's a totally consumer, non-business savvy viewpoint... Satellite radio is great for those who travel a lot and don't want to keep reprogramming their car radios or live with "dead zones". But with the price of gasoline rising, and iPods, I wonder if the heyday is fading. This merger has taken way too long to happen, and some of us have just about given up hope that it ever will take place. I know that when most of my beloved shows bailed from XM to go to Sirius, I waited for the merger to complete, so I could get them back without having to buy another radio and subscription. Now that the DOJ has approved the merger, but the FCC still has to rule, I am not going to rush out to buy a Sirius subscription/radio. Which is too bad, because I probably have sat on the fence way too long as it is... But just don't have the heart to lay out more cash during the recession just to get Stern and other Sirius-only programming. I wonder how many of those "all time high subscription rates" are dual subscriptions by people trying to hedge their bet on which company will become more dominant after the merger. I am sooooo over the initial wow, and need more bang for my buck. If the merger allows for additional features, then maybe they will be able to win back my enthusiasm... Maybe... but it better happen soon.

[psu74dl]

I can't believe this article or the posts that are in support of it. The name of this article, or the posts following it should be " why let something like the facts get in the way of a good arguement"

Fact;
Sirius or XM are not a mandatory for the American consumer to have in order for them to listen to music or talk radio, therefore the prices will be controlled by guess who ? hmmmm . did you guess yet ? THE CONSUMER. Yes imagine that a market controlled by its listeners.
Fact;
The FCC can't place programming restrictions on Sirius/xm because we pay a premium to listen to it much like you pay to watch un-cut movies on HBO etc.
Fact;
XM is currently renting their sat. space to where Sirus owns their own sats and actually according to technology professors at M.I.T. are much more advanced than XM in the tech. department. And as a person who has owned both Sirius and XM radios. Sirius has better quality, less interference, and much better programming choices.
Fact;
As for his Howard Stern comment which afterall is a headline to get people to read his clear channel sponsered article.
When Howard Stern signed with Sirius they had 643,000 subscribers, now they have 8,146,592 subscribers and counting, and after the Merger will have 20+ million subscribers also they will be sharing expenses condensing their channels and giving sports fans a fair alternitive when it comes to MLB, NFL, NASCAR etc. I dont know why everyone is so afraid of this merger maybe its because they just don't want to see stockholders like me who owns 5,000 shares of XM and Sirius stock make money when the profit margin forces the stocks to trade at 22 dollars a share.

FCC Sign off on the deal allready don't be just another reason for the world to see that the "American Way of Life is dead"

[jsl4980]

Can you put a disclaimer that this horrible FUD is brought to you by the National Association of Broadcasters. The lack of competition in satellite radio is great - every new car will have a single receiver where you can get all your programming. So I don't have to rip out an XM receiver and install a Sirius receiver on my next new car. Now I can get MLB and NFL on one radio. Will costs go up? No, right now it would be about $25/month for both XM and Sirius, as long as all their content stays under that price then the costs went down.
Don't blame Howard Stern for making a great contract, do your own job and worry about yourself.

[Domino0377]

1. NO NEW EQUIPMENT - Confirmed
2. NO PRICES INCREASE - Confirmed
3. HOWARD STERN CHANGED THE FACE OF SAT RADIO (And Saved Sirius) - 600,000 pre-stern and 10 million after... You might not have gotten it because of him but you started hearing about Sirius Radio's because of him...

4. Al-a-Cart Price plan lets you pick your Favorite Channels... SO MANY more choices for cheaper if not same price...

5. Record High Subscribers doesn't equal Cash - they have spent alot on Duplicate Advertising... and there was the issue XM had with it's hardware outage and that broken SAT in space... and Sirius had issues with some of the First Radios..Also, let's Remember Guys what they are doing... THEY ARE LAUCHING ROCKETS WITH SPACE SATs in orbit... I am sure that's not Cheap... LOL

6. NO COmmericals on Sirius.. That will not change... Mel was qouted

[hfstern]

Stern's paid for himself already--according to King Mel: When Stern was announced--650,000 subs. Last month--8.5 million subs in 3 years! How much cash flow is that, you dim wit?

[Borgslayer]

What dopey article. Gutenberg tries to offer "fact" without really researching or verifying. He mentions duplicating programming so "surely" we'll lose fav programing, kinda oxymoronic I say. And what does he know about what it takes to make these companies profitable., jeez... This guy sounds live a shill for the terrestial radio lobbyist. If his article appeared online boards, he would've been tagged as a troll.

[xxtcsxx]

Isnt this argument ready to end? The idea of these two companies coming together and being a monopoly that is going to harm the consumer is a fraudulent scare tactic used by the National Association of Broadcasters (NAB) who has lobbied religiously and has stalled the process for a year now. For starters Exxon Mobile that merged last year only took 3 months to decide . In the age of the iPod and other digital media devices... MP3 CD players, HD Radio, regular gah-bage radio. The options that you have are only limited by the technology that is out there. Might I remind everyone that Sirius and XM subscriptions are a luxury not a necessity. You dont like the medium? Dont pay for it. Its not something that you need... like oil or gasoline... to make your life function. XM and Sirius arent competing against just each other. They are competing with all the other forms of media available for people in their home or their car. Watching these companies bleed out and the medium disappear because they couldnt stop hemmoraging money will only limit the choices available to consumers as the media goes away. This is the same thing that happened with the record industry when the technology came out to efficiently rip and encode mp3 files. These slow moving big industry types dont like change. Especially when it comes to changing their business plan. I say let them sink and let free radio give the people what they want.

BABABOOEY!

[dsommer]

Wow...Steve - Do you do ANY research before you write your blog? Sirius and XM put a pricing structure in place for the next few years after the merger, so they won't be raising prices. Also, do you really think they're going to raise prices when their main competition is FREE? People don't HAVE to subscribe to either service because its just that, a service. If they raise prices, people cancel. Its as simple as that. Not only are you uninformed, but I'm left questioning your business IQ as well.