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July 27, 2008 2:55 PM PDT

Sirius-XM merger: No static at all

by Steven Musil

Updated at 4:45 p.m. PDT to clarify that portable receivers are capable of receiving live program signals.

The marriage of satellite radio providers Sirius and XM has finally received the blessing of the Federal Communications Commission on Friday. Now we can all finally get the game we want.

For many prospective customers, a key sticking point was the different selections of sports programming offered exclusively by each provider. A few years back, I wanted to make a present of a Sirius subscription to a friend who spends a lot of time driving around Northern California, especially in places that don't get AM/FM signals. After sampling XM and Sirius' music selections, I knew that she would enjoy the Sirius offerings over the XM offerings. But XM broadcasts more games of the sports she enjoyed--just not all of them. There really wasn't a clear winner. So, to keep from saddling her with the wrong or incomplete service, I opted against the gift. Basically, the lack of a comprehensive offering cost the industry a customer.

I suspect that this was a dilemma faced by many listeners who were in search of more than their local radio stations could offer. But the merger means that listeners will be able to choose from a menu to add programming a la carte. For subscribers, this is a big win in programming. You can also bet that the prospect of replacing existing receivers will irritate early adopters.

Critics, however, will tell you that the merger will result in a monopoly. While the elimination of immediate industry competition will create a de facto monopoly, satellite radio is not the only source of music, talk, or sports broadcasting available to consumers. People are getting their music from many sources today. Besides satellite radio, people are finding their favorite tunes on Internet radio, MP3 players, music-playing cell phones and even traditional terrestrial radio.

To tell the truth, I don't listen to terrestrial radio, or traditional free radio, much anymore, unless there is a game I can't get on television. Indeed, "free radio" offers one of the more exciting and attractive music options in the form of HD radio. Unfortunately, some four years after HD radio hit airwaves, consumers have not embraced the new format, which ultimately suffers in comparison with satellite radio because of its limited range. If I weren't so pleased with Sirius' music programming and the fact that it's offered as part of my Dish subscription, I would probably spring for an HD receiver to plug into my A/V home receiver. But I keep waiting for an affordable A/V receiver to come on the market that has HD radio built in as part of the tuner. When that happens, expect home satellite subscriptions to wane a little.

(Disclosure: I listen to music-only Sirius at home via Dish Network and a complete subscription in my wife's car. The only financial interest I have in either company comes in the form of monthly subscription bills.)

You might think that the satellite industry has the upper hand in broadcasting. But while we're on the topic of things we're waiting for, let's look at some of the things the satellite industry can improve. While Sirius now touts portable units as being capable of receiving live signals, many users complain of spotty or poor reception while on the go. Also, while traffic and weather reports for a few metropolitan areas is great, satellite radio can't provide the same content as local news radio stations, so it would be nice have a portable unit that also gets AM/FM radio stations.

As a prerequisite for FCC approval, the companies agreed to freeze subscription rates for three years. If they try to jack the prices on consumers, expect consumers to change the dial, especially with the wide variety of options that are available to consumers today.

How will this merger affect your listening habits? Write in to TalkBack and let us know.

Steven Musil is the night news editor at CNET News. Before joining CNET News in 2000, Steven spent 10 years at various Bay Area newspapers. E-mail Steven.
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Add a Comment (Log in or register) Showing 1 of 2 pages (34 Comments)
by cwp29 July 27, 2008 3:38 PM PDT
Finally. Betcha the commissioners who fought it for so long end up with sweet jobs in the terrestrial radio industry. And the politicians who fought it for the NAB will get nice campaign contributions. American politics is so corrupt.
Reply to this comment
by gosmith7590 July 27, 2008 3:55 PM PDT
"Sirius/XM Merger Officially Approved In Only 493 Days!"

"Turning 24 channels over to non-commercial and minority programming. Three year price freeze. Open Access. A-La-Carte pricing available within 3 months of deal closure. The FCC will open a new case to look more closely at HD inclusion."

http://tinyurl.com/6kw3mn

"Ibiquity Fears Open Access Will Not Help Adoption Of HD Radio"

"I have said it before, and I will say it again. HD Radio has a responsibility to market itself. They should not be out looking for business model hand-outs. They should not be trying to circumvent negotiations with OEM?s by getting into car dashboards on the backs of the negotiations that Sirius and XM have made, and by extension, on the backs of shareholders in the SDARS companies."

http://tinyurl.com/6pgnq2

Crappy HD Radio lost! HD Radio is a farce!

http://hdradiofarce.blogspot.com
Reply to this comment
by anthonysmission July 27, 2008 4:00 PM PDT
This merger is just another example of capitalism. [Content edited by site admin for privacy]
Reply to this comment
by Xacto666 July 27, 2008 4:04 PM PDT
I could not agree more with these comments. I have no problem with the govt approving the Exxon/Mobil merger so quickly, but in comparison this one is held up for so long? Absolutely ridiculous. I am a big Sirius fan but I really enjoyed a couple of the music stations on XM for the year I had that service. The Sirius programming on their counterparts IMO is not as deep, so if those channels survive I'd love the individual programming options...but I've heard thru a good source that will require a change in my unit. Sigh.
Reply to this comment
by tnrjong July 27, 2008 4:24 PM PDT
"But that is not the case for people who want to take their programming for a walk. Portable units basically record and store the programming for later use, which is a real drawback if you are trying to listen to live games."

um... i guess since you have sirius, it's mildly excusable that you got this wrong. although as a journalist, i would hope you would at least check a claim like this before you print it.

i've had a tao myfi from XM for going on two years now (it was released more than three years ago, 12/04), and it's portable and i get live satellite broadcasts on it. my wife even uses hers with a small external antenna and gets reception in the gym while she works out.
Reply to this comment
by Rockin Rich July 27, 2008 5:14 PM PDT
The reason for the delay was that the NAB, the group of businesses that use and profit from the public airwaves for free... didn't want the competition. They tried to thwart satellite radio in the first place and continued to try to kill it.

HD radio? A joke, and too little too late.
Reply to this comment
by arizonahuskerfan July 27, 2008 7:15 PM PDT
WHAT????? Profit for free?? Do you know what it takes to purchase a commercial radio broadcast license? Not to mention what it costs to run a commercial operation. The electricity bill alone for a class C FM runs in the neighborhood of $20,000 per month.

My god, how uninformed you are to make a comment like that.
by CLEFSTICK July 27, 2008 5:22 PM PDT
I will visit every day the Sirius Met Opera station and desire to retain access to all of the XM classical music channels
Reply to this comment
by perogi21 July 27, 2008 5:45 PM PDT
"This merger is just another example of capitalism."

Really? Capitalism in America? Next thing you will say that our government is a Republic.

"But that is not the case for people who want to take their programming for a walk."
Untrue.
Stiletto 100
http://www.sirius.com/servlet/ContentServer?pagename=Sirius/CachedPage&c=ProductAsset&cid=1158082417240
Features:
Live portable reception of SIRIUS programming.

Seriously, this is some horrible journalism.
Reply to this comment
by Cmode22 July 27, 2008 6:40 PM PDT
I just bought the life time subscription with Sirius before the merger. Now what? Will I get to enjoy both services or will I have to pay more now?? Anyone know?
Reply to this comment
by geofos July 29, 2008 4:12 AM PDT
From what I understand your lifetime subscription will definitely be honored. Only question is will that be what you get now or with the ala carte system being introduced will you still get the service, just not all of it and wind up having to pay after all? I don't think so but it would suck if that happened.
by Rockin Rich July 27, 2008 6:46 PM PDT
Yes.
Reply to this comment
by jbattan July 27, 2008 6:54 PM PDT
I really like some of the programming on both Sirius and XM, and am glad they're merging. But I don't think I'll become a subscriber, because during the times I've used it in various cars, it cuts out frequently when I drive under bridges, tree cover, etc. It's really annoying and would be easy to mostly eliminate if they just put 60 second buffers in the radios, or a terrestial repeater in mid-market Portland OR.
Reply to this comment
by arizonahuskerfan July 27, 2008 7:09 PM PDT
The only bad point is having to give away so much bandwidth to "non-commercial" and minority interests. Talk about giving away the store.

From much past experience, "non-commercial" = Few listeners

Just look at PBS and NPR for example. A tiny fraction too small to imagine make up the audience of these two taxpayer-funded leftist organizations as compared with commercial broadcasters. That is the plain fact not open to dispute.

I am all for the merger, but it sounds like 23 channels wasted on my radio.
Reply to this comment
by arizonahuskerfan July 27, 2008 7:19 PM PDT
ORIGINAL COMMENT:
"The reason for the delay was that the NAB, the group of businesses that use and profit from the public airwaves for free... didn't want the competition. They tried to thwart satellite radio in the first place and continued to try to kill it.

HD radio? A joke, and too little too late."


REPLY:
WHAT????? Profit for free?? Do you know what it takes to purchase a commercial radio broadcast license? Not to mention what it costs to run a commercial operation. The electricity bill alone for a class C FM runs in the neighborhood of $20,000 per month.

My god, how uninformed you are to make a comment like that.
Reply to this comment
by cwp29 July 27, 2008 8:18 PM PDT
Do you work for the NAB? If the merger was anti competition, why would they care? The reason they care is because satellite is competition for terrestrial radio and they hoped XM and Sirius would go broke so they could continue their commercial heavy garbage on the public with no competition. HD is a joke. HD? High Definition? What does that mean? The quality of the sound depends on the quality of your sound system.
by Rockin Rich July 28, 2008 1:40 PM PDT
Radio frequencies are the property of the public. Broadcasters pay little or nothing for their use.

Please do a little research before accusing someone of being uninformed. (Unless, of course, you're a broadcaster. If so, never mind.)
by pjk0 July 27, 2008 9:51 PM PDT
It is intellectually dishonest in the extreme to rationalize the creation of monopolies by claiming the existence of bogus competition.

There are fundamental distinctions between satellite radio service and all of the other examples of "competition" provided both by the writer of this article, the commenters here, as well as the parties to the merger.

Satellite radio is entirely unique, and provides unique advantages over these claimed "competitors". It provides a clearly differentiated alternative to 1) pre-recorded content (MP3 players, CD's, videos, etc), 2) geographically static content (audio broadcast via wireline broadband delivery such as cable, DSL, etc), 3) geographically limited broadcast content (AM/FM terrestrial radio) and 4) other wireless audio content. (ie audio delivery over cellular networks)

Choice #1 requires the user to purchase and organize content beforehand - this has been the strong appeal of terrestrial radio over records/CD's for generations. Choice #2 tethers the listener to a single physical location. Choice #3 is generally inferior due to limited geographic coverage (ie while traveling on the road), in programming variety, audio and reception quality and reliability, and predictability/consistency. (you can't listen to your favorite station while you drive across the country) Option #4 is impractical for a variety of reasons including cost, quality, lack of an independent delivery mechanism from a person's cellphone, etc.

The bottom line is - none of these things are actually competitors to satellite radio. It's a fallacy. The XM/Sirius merger creates an unconditional monopoly. As soon as the short-term merger-mandated limits expire, prices will go up, advertising will go overboard, quality will go down, variety will go down.
Reply to this comment
by c300zxs July 27, 2008 10:24 PM PDT
"You can also bet that the prospect of replacing existing receivers will irritate early adopters."

I have to buy a new receiver? Are you kidding me? I like mine so much that my girlfriend bought me a spare for when the current one burns out. What a bunch of crap.
Reply to this comment
by frankjacob1 July 28, 2008 5:24 AM PDT
My wife has Sirius and I have XM based on our need to hear NFL (Sirius) and NHL (XM) games. While I don't think the merger will benefit consumers in the long run the nice part about Satilite Radio is I can cancel at any time. In some ways the Sirius/XM merger places increasing pressure on their management to get it right for the highest number of consumers otherwise consumers will vote with their dollars and invest in alternative programming. Part of the popularity of sat radio is the fact that 12.95 a month is cheaper than purchasing a new CD or album download. The higher the price goes the better alternatives begin to look.
Reply to this comment
by i_am_still_wade July 28, 2008 6:25 AM PDT
XM has better satellites by far. Sirius has 3 satellites, 2 of which are always visible over the US. XM has 4 geosynchronous satellites, 2 of which are active and the 2 older ones are on standby. Thus, while XM has worse stations, it has better quality audio. Being an XM subscriber, I rarely have a problem with the signal. I hope the merger company has enough sense to keep XM's superior satellites.

Second, no matter what anyone says or thinks, this is NOT a monopoly for your ears. The fact is the satellite radio has to compete with the iPod, which conveniently plays the tunes you like best. It has to compete with FREE over-the-air radio, which is what people will switch to if the cost goes up too much. It may be unique, but it has competition. To say otherwise is like saying the sky is green: you can say it, but that doesn't make it true.

By the way, what is this new company going to call itself?
Reply to this comment
by Renegade Knight July 28, 2008 7:10 AM PDT
It won't. Sirius may be portable but it's not portable enough to follow me around with no muss and no fuss. Until it is, I'm really not interested. A simple RFID chip would do the job but since that can be cloned I doubt Sirus would do it. That leaves them with horrid portability.
Reply to this comment
by tmstowe July 28, 2008 7:22 AM PDT
I have a Sirius Stilletto 100, that DOES allow me to listen to live programming, without being plugged into a vehicle or home docking unit. The headset has the antenna in it. It is a little large (they are not ear buds), but they work great. This unit has a newer version the Stilletto 2. Both will allow you to record 100 hours of programming to listen to later, as well as being able to download other music to these units. Add the live programming and they are great units. I've also added a vehicle dock to my motorcycle and use the FM adapter to listen through the existing radio.
Reply to this comment
by tmstowe July 28, 2008 7:28 AM PDT
One more thing - I purchased a lifetime subscription. It pays for itself in about 39 months (31 months for the discounted rate I got it for...). If you plan on having one for a while - get the lifetime. I don't have the monthly charge, I can cancel and get a partial refund for the unused time, and I can change radios (3 changes, and they do cost $75 for each change...). Since I plan on using it for at least 3 or 4 years, it was the most cost effective option for me. I understand that the lifetime subscriptions will still be available.
by wsltexas July 28, 2008 9:58 AM PDT
I have XM. I listen to music and baseball plus NPR. I have to listen to regular radio for everyday NPR programs and football. Now that I'll be able to get those on satellite I don't know that I'll ever need regular radio. We just drove cross country and XM was fabulous. We tried stations we hadn't listened to before and added comedy when we got bored. With the addition of Sirius I believe this is the right move. Just don't get greedy. As good as you are you're not a requirement.
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