Monday, January 01, 2007

The New York Times Comments On XM-Sirius Merger

Loaded With Personalities, Now Satellite Radio May Try a Merger
By ERIC A. TAUB, Jan 1, 2007, The New York Times

Last year's debut of Howard Stern’s radio show on Sirius Satellite Radio put the technology on the map, raising the public's awareness of satellite radio and helping to boost significantly subscriber totals for Sirius and its larger rival, XM Satellite Radio.
Today, thanks in part to the outsize radio personality, the Stern Effect has increased Sirius's base to about six million subscribers, up 80 percent from one year ago. XM has increased its numbers by more than 30 percent, ending 2006 with 7.7 to 7.9 million customers.
“There is a tendency to view satellite radio as if the glass is half empty, and that it is a failure or disappointment,” said Craig Moffett, senior cable analyst for Sanford C. Bernstein.
“In fact, nothing could be further from the truth,” he said. “Satellite radio is growing faster than any consumer product except for the iPod.”
But Sirius and XM shares have taken a battering on Wall Street, with prices for both off about 50 percent from their year-ago levels. On Friday, Sirius closed at $3.54, while XM ended the year at $14.45.
And now, the industry may be getting ready to try an even more dramatic third act — a possible attempt to merge the two services.
The benefits of a merger have been promoted by the chief executive of Sirius, Mel Karmazin, for a number of months, and Sirius officials continue to say that a merger would be a good thing. XM has not commented on the possibility, and neither company has said whether they have actually discussed the issue...read more: here

1/01/2007 08:18:00 PM

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