Wednesday, March 07, 2007

FCC To Martin: Call In The Economists

What is it about the post-merger rate structure that Kevin Martin does not understand?

Currently, pre-merger, if you want, for example, NFL and Stern, the rate is $12.95 per month (with savings for an annual commitment). If you want MLB and Oprah, the rate is the same $12.95 per month. However, if you want NFL, MLB, Stern and Oprah, the consumer must subscribe to both XM and Sirius services, so the rate is $25.90.

Hypothetically, it's post-merger, so let's say you chose NFL and Stern, the rate is still $12.95, and if you select MLB and Oprah, the rate is the same. However, if you chose NFL, Stern, MLB and Oprah, the rate is going to be more than $12.95 and less than $25.90, thus a savings to the consumer.

What about this math do you not understand, Mr. Martin?

3/07/2007 06:34:00 AM

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  • Good explanation. There is nothing complicated in understanding how much the user must now pay to access all programming, and how that price would likely be reduced.

    Perhaps Martin is trying to appear overly thorough knowing that he will likely approve the merger?

    By Anonymous Anonymous, at March 07, 2007 7:48 AM  

  • Mel's remarks were misleading. The idea was that the merger would save consumers money AND give them more choice.

    But very few consumers are interested in getting 300 channels, even if it costs less than the 170 or 130 they get now, doubled. How many people really are willing to pay that? Few, I think.

    Anyone who believes that reducing competition leads to better value for the consumer is just not using his head.

    By Anonymous Anonymous, at March 07, 2007 10:38 AM  

  • One of the measures being discussed is a tiered service. This allows consumers to get what they want and not pay for the rest. Suppose music only was $9.99, sports were $2.99, talk and news radio was $2.99, and adult entertainment and comedy was $2.99.

    In this example, the full package is $19, but if someone is only interested in certain aspects that is all they pay for.

    Rather than a simple dismissal of the idea of a merger, perhaps your efforts should be directed at creating a merged company that offers what you are looking for

    By Blogger SSG, at March 07, 2007 10:57 AM  

  • Merger and Hybrid satellite systems.

    As I see it:

    Sirius and XM will have to maintain current satellite constellations to be

    to provide current subscription content to subscribers with existing radios.

    If the merger goes through and new hybrid radios are released both

    constellations will have to be retained to provide service to current

    However if Ala Carte subscription is made available subscribers using the
    new hybrid receiver

    could perhaps select a number of channels from both services with no
    increase in

    subscription costs. For example if a XM'r wanted NFL they could remove MLB

    and receive NFL at no increase in price as received channel count would stay
    the same.

    A Sirius user could remove NASCAR and opt for MLB at no increase in price.

    By Anonymous Coyote, at March 07, 2007 1:01 PM  

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