OT: Sirius and XM to Merge

icvu42 · Post by **icvu42** » Mon Feb 19, 2007 5:15 pm

http://money.cnn.com/2007/02/19/news/co ... 2007021914

Don't know if this is good or bad. As a Sirius subscriber, I like the thought of possibly getting the MLB package now. But I'm worried about a rate increase.

Rick

Kissrox · Post by **Kissrox** » Mon Feb 19, 2007 5:26 pm

Can you say MONOPOLY...ridiculous...Who will be their competition now?

Dave · Post by **Dave** » Mon Feb 19, 2007 5:37 pm

Kissrox wrote:Can you say MONOPOLY...ridiculous...Who will be their competition now?

Terrestrial radio, mainly. I think they either merge or there will be a monopoly through attrition. Both companies are losing money and not hitting their subscription targets.

Everyone is quick with a "monopoly" cry these days. Some markets only bear one successful company and satellite radio to this point seems to be one such market.

As an XM subscriber, I'd dig the addition of the NFL channel. But what are they going to do about the equipment? Having to simulcast to two different hardware bases will take away some of the efficiency savings.

dbdynsty25 · Post by **dbdynsty25** » Mon Feb 19, 2007 5:39 pm

I would definitely consider getting satellite radio if they did in fact merge. I didn't want to get one, missing out on some of the other. Combining everything would make it a lot more attractive.

Sully · Post by **Sully** » Mon Feb 19, 2007 5:59 pm

dbdynsty25 wrote:I would definitely consider getting satellite radio if they did in fact merge. I didn't want to get one, missing out on some of the other. Combining everything would make it a lot more attractive.

I'm a Sirius subscriber, and love it. I'd gladly pay a slight increase for the MLB package alone.

Diablo25 · Post by **Diablo25** » Mon Feb 19, 2007 6:15 pm

I can't live without the MLB package. You Sirius guys will love it if this this is real. i just hope the subscripton price coesn't go thru the roof. There are only a few exclusives on each one so it should be too difficult to merge.

GTHobbes · Post by **GTHobbes** » Mon Feb 19, 2007 8:11 pm

I'm an existing XM subscriber and if this happens without a major price increase, I might just tell Directv to go f**k themselves whenever it comes time to re-up the NFL package later this year.

dbdynsty25 · Post by **dbdynsty25** » Mon Feb 19, 2007 8:28 pm

We've got an XM subscription, so it works great for the MLB...I definitely would like to have all of the "season passes" on one merged system. Something tells me it won't happen though. We'll end up having to pay per sport, just like we do on cable/satellite tv now.

Remember, XM and Sirius were using the sports packages to get you to subscribe to their service. When the packages will be on both networks (or one merged one), you'll likely have to pay for the premium service since you can't just go to the 'other guy' to get it. Mark it down.

Dave · Post by **Dave** » Mon Feb 19, 2007 8:44 pm

Yeah, I'm definitely concerned about what will happen to subscription costs.

Sirius CEO, who is tagged to be the merged-company CEO, has already mentioned a la carte offerings, so I'm expecting a $4.99 "sports package" fee or something like that.

dave360 · Post by **dave360** » Tue Feb 20, 2007 8:53 am

Sully wrote:
dbdynsty25 wrote:I would definitely consider getting satellite radio if they did in fact merge. I didn't want to get one, missing out on some of the other. Combining everything would make it a lot more attractive.
I'm a Sirius subscriber, and love it. I'd gladly pay a slight increase for the MLB package alone.

Same here Sully. I'd give a few bucks extra a month for MLB, Opie and Anthony, FOX sports radio, Sporting News, and a few of the other channels.

kevinpars · Post by **kevinpars** » Tue Feb 20, 2007 9:17 am

A monopoly of 2 companies who have individually never showed a profit isn't much of a monopoly. I think that the key is getting the 2 companies merged and coming up with a policy going forward so that people on the fence (like me) get off the fence and commit. I would love to have something where i could listen to games, have a choice of different sports radio shows, etc. And music as well. I will be following this with interest.

Kissrox · Post by **Kissrox** » Tue Feb 20, 2007 9:42 am

Once they merge and combine the great features of each company and everyone who is on the fence jumps in what is to stop them from charging $20+/ month. It might not look like much now but if they begin to turn a profit they will be able to do what they want from poor customer service to higher prices. I just don't like the idea of not having a choice. I hate cable TV in this way as well. Now we have choice between dish and cable.

bdunn13 · Post by **bdunn13** » Tue Feb 20, 2007 10:22 am

I have avoided sat radio as I have no interest in giving my money to Martha Stewart or Howard Stern.... drop both of them and I might would give it a try.

Sudz · Post by **Sudz** » Tue Feb 20, 2007 10:27 am

subscriptions SUCK now...what will allow them to charge MORE? they could...but they'd probably lose people fast.

GTHobbes · Post by **GTHobbes** » Tue Feb 20, 2007 11:08 am

"Given the government's history of opposing monopolies in all forms, NAB [the National Association of Broadcasters] would be shocked if federal regulators permitted a merger of XM and Sirius," NAB spokesman Dennis Wharton said in a statement. "

I still wish someone could explain to me how this is expected to be a "close call" in getting past the regulators, while the EA and Directv/NFL "exclusives" never received any scrutiny. I remember EA saying that Madden competed with the Halos and Zeldas of the world for the videogamers' dollar, but that's horseshit. If I want an NFL game, I've got one choice. And there's a helluva lot of money involved in the NFL videogame industry.

Sorry for the threadjack, but I wanted to rant on the Monopoly subject for the 101st time.

Kissrox · Post by **Kissrox** » Tue Feb 20, 2007 11:16 am

I think why Madden is not considered a Monopoly is becasue anyone can put a football game out. It won't have the NFL license but they do not have a Monoploy of Football games, just the NFL and it's players. With Football 2k8 or whatever it is called coming out, this will gaive Madden some competition; which we all know will be good for all of us.

pk500 · Post by **pk500** » Tue Feb 20, 2007 11:21 am

GTHobbes wrote:I still wish someone could explain to me how this is expected to be a "close call" in getting past the regulators, while the EA and Directv/NFL "exclusives" never received any scrutiny.

NFL games are still available to the public on free and cable TV. It's not like all NFL games are on Direct-Sunday Ticket only. So that one passes the regulators pretty easily.

The NFL is just one genre of videogames, albeit a big one. EA hooking up an exclusive with the NFL is no different than Sirius signing Stern for $500 million.

If you want Stern, you go to Sirius. Otherwise, there are tons of other listening options out there. If you want to read Tom Friedman, you buy the New York Times. Otherwise, read another columnist. If you want a current NFL game, you play an EA game. Otherwise, play another genre.

But if you want satellite radio -- not the individual programs but satellite radio, period -- there only will be one choice. That's why regulators will look at this closely.

If EA gobbled up all gaming companies and was the only producer of games or if all NFL games only were broadcast on Direct-Sunday Ticket, that would be a better analogy to what is happening with satellite radio.

Take care,
PK

GTHobbes · Post by **GTHobbes** » Tue Feb 20, 2007 11:30 am

I hear ya, PK, but I just disagree I guess. One reason why this is different is because certain entities, e.g., the Justice Department, have to look at the merger and give their approval, whereas, in the exclusives situation, there's no one looking at anything. EA didn't need the government's blessing to screw over us gamers, while the government has to get involved here.

RobVarak · Post by **RobVarak** » Tue Feb 20, 2007 11:47 am

GTHobbes wrote:"Given the government's history of opposing monopolies in all forms, NAB [the National Association of Broadcasters] would be shocked if federal regulators permitted a merger of XM and Sirius," NAB spokesman Dennis Wharton said in a statement. "

I still wish someone could explain to me how this is expected to be a "close call" in getting past the regulators, while the EA and Directv/NFL "exclusives" never received any scrutiny. I remember EA saying that Madden competed with the Halos and Zeldas of the world for the videogamers' dollar, but that's horseshit. If I want an NFL game, I've got one choice. And there's a helluva lot of money involved in the NFL videogame industry.

Sorry for the threadjack, but I wanted to rant on the Monopoly subject for the 101st time.

Anti-trust law is far more complex than playing wack-a-mole on companies who secure exclusive licenses or dominate industries because competitors opt not to enter the marketplace (satellite radio). The gov't looks at the totality of the markiet, the historical composition of market and consumers, the complexity of the industry, intellectual property ownership, actual consumer price elasticity and a million other factors.

If parties willingly enter exclusive license agreements, it is also not necessarily a monopoly. We (and corporations) are free to sell or license our assets as we choose. As long as the agreement isn't the result of coersion or duress, the justice department will generally keep out of things. It took years for them to take up the Microsoft case, for instance, even though everyone knew that MS was strongarming people for a decade.

Personally, I think anti-trust law is one of the few areas where government analyzes soberly and is prudent in avoiding overreaching...probably because the majority of day-to-day decisions in DoJ are made by lifers rather than political hacks.

Just because a consumer is left with only one choice does not necessarily mean that there is a monopolistic situation. It might suck, but let's not go calling for Uncle Sam in every case.

As for the NAB

The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts.

Not a party that would be inclined to impartial analysis of the situation

bdunn13 · Post by **bdunn13** » Tue Feb 20, 2007 11:53 am

"It took years for them to take up the Microsoft case, for instance, even though everyone knew that MS was strongarming people for a decade. "

Agreed.. and even then our gov just slapped MS on the wrist. MS continues to do the same things today they were doing 10 years ago.... its even worse today as they have a license to plunder as they know the government is not going to take action against them any time soon.

GTHobbes · Post by **GTHobbes** » Tue Feb 20, 2007 12:35 pm

RobVarak wrote: Personally, I think anti-trust law is one of the few areas where government analyzes soberly and is prudent in avoiding overreaching...probably because the majority of day-to-day decisions in DoJ are made by lifers rather than political hacks.

That's interesting you say that about the DoJ...I was just reading an article on the subject at the washington post, and it quoted observers as saying that XM/Sirius picked a good time to announce this as it would have been "a much closer call" if they waited and Democrat appointees took over. According to those observers, the deal has a better chance of going through on the Republican watch. Not sure if any of that is true, but it's what's being reported.

GTHobbes · Post by **GTHobbes** » Tue Feb 20, 2007 1:29 pm

While we're on the subject of exclusives:

"Washington, D.C. (February 19, 2007) -- DIRECTV still appears to be close to landing Major League Baseball's ''Extra Innings' package. However, cable TV operators are making a last inning pitch to keep the games, according to industry sources.

If DIRECTV wins, as expected, it would get the exclusive rights to offer the package which includes up to 60 out of market baseball games each week.

The satcaster would also be able to show many of the games in High-Definition as part of its plan to expand high-def programming in 2007 and beyond.

However, after The New York Times reported last month that DIRECTV and MLB were expected to close the deal, several congressional leaders including Sen. John Kerry (D-Mass.) blasted the arrangement, saying it would disenfranchise millions of cable viewers.

"I am opposed to anything that deprives people of reasonable choices. In this day and age, consumers should have more choices -- not fewer," Kerry said in a statement this month. "A Red Sox fan ought to be able to watch their team without having to switch to DIRECTV."

Will cable's baseball rights be declared out or safe?

Concerned that Congress could re-open legislative probes of the league's steroid policies and other sticky issues, MLB officials decided earlier this month to give the 'Extra Innings' package another look before making any announcements. The league has since searched for a plan that would satisfy both congressional critics and maintain DIRECTV's exclusivity over most games in a pay package.

In addition, according to sources, cable TV operators have freshened up their bids to keep the pay package which has been available to both cable and satellite operators for several years. The operators are also leaning on congressional supporters such as Sen. Arlen Specter (R-PA), whose state is the home of Comcast's corporate headquarters, to keep the pressure on the league.

The flurry of activity -- and scores of critical commentaries in the press -- is why the DIRECTV deal has been on hold for nearly a month.

In a conference call with analysts this month, DIRECTV CEO Chase Carey was asked about the satcaster's plans for Extra Innings but he refused to comment, saying nothing has been officially announced by the league.

In addition to what cable and DIRECTV are willing to pay for Extra Innings, another negotiation point is Major League Baseball's planned 2009 launch of a new channel devoted to baseball. The league believes DIRECTV would offer it to most, if not all, of its subscribers as a lure to sign up for the Extra Innings package."

Sport73 · Post by **Sport73** » Tue Feb 20, 2007 1:29 pm

I think XM and Sirius have a pretty compelling argument against the regulators who might claim that this is a breach of anti-trust law. Instead of viewing Satellite radio as its own marketspace, where competition needs to exist, they (rightly) view it as just another option within the Digital Audio landscape that includes everything from mp3 players & podcasts to cell phones with internet radio capabilities, PLUS good old-fashioned FM/AM radio. Coupled with the fact that both companies have operated in the red and have seen subscriber uptake slow, they have a right to claim that the market simply can't support 2 players right now.

From a consumer perspective, I think this is mostly a win. There will be a honeymoon period of cross-bred programming where you get the best of both services; however, without competition the need to sign expensive exclusive licenses will diminish and the cost of such services will be passed on to the customer. If the deal completes in 2007, expect a basic rate hike for the service by summer 2008 as well as an entirely new 'a-la-carte' pricing strategy that leaves you paying a lot more if you want Sports, Stern, etc.

Personally, I really only listen to about 5 channels on XM: Opie & Anthony, Comedy 150, Ethel, Flight 26, Fred, and Lisa; plus the occasional baseball game. I think the MLB license is worth more for radio because it's a lot more likely that you'll want to catch a game on the radio than you would want to listen to one of only 17 weeks of NFL games while driving.

wco81 · Post by **wco81** » Tue Feb 20, 2007 1:55 pm

CNBC had an analyst on saying this probably will be stopped.

He brought up the example of the Echostar (Dish Network) attempt to buy out Direct TV a few years ago. That was stopped but now that I think about it, part of it was Murdoch got "activists" to lobby the govt. including some objections on religious grounds like the merged entity wouldn't allow as many outlets for religious programming or something. That was just and example of a political lobbying campaign that worked.

DOJ has lifers but they're trumped by political appointees all the time. The lifers pushed the MS case. After all, they'd put several years into it and they successfully won a ruling at the appelate level. But basically, Ashcroft made some noises about govt. cracking down on monopolies and then basically settled and let them off scott free.

A couple of years ago, the judge overseeing Microsoft's compliance to the settlement noted MS was trying to use loopholes.

As for satellite radio, it's a big meh. Fact is, people just download and listen to iPods on a much wider scale than satellite radio can ever hope to reach.

The non-musical programming does have some appeal but people just don't see it as worth another monthly bill. If your favorite team is in another market, then it might be worth it during the football season or hockey season or whatever. But year round?

Stern is more entertaining than any other radio options. We get Opie and Anthony and that's the most boring s*** I've ever heard. Listened for about 20 minutes when they first came on in this market and they were blabbering about some old Russ Meyer movie playing a long clip, never once funny. Never listened again.

But I would never pay for Stern. If I couldn't listen, I'd just listen to more podcasts, more music, sports talk, etc.

So far, most people seem to have the same attitude about satellite radio, which is why they're on the rocks.

RobVarak · Post by **RobVarak** » Tue Feb 20, 2007 2:06 pm

The political operatives drive policy at DoJ, but anti-trust is still much deepr in lifers than most agencies. The point I made was that it was much more moderate in exercising its police power than other federal regulatory agencies, which are institutionally pre-disposed to regulating as much and as often as possible.