Wednesday, March 28, 2007

WSJ: How Listeners Will Fare In Merger

How Radio Listeners Will Fare in a Merger Of Sirius and XM
March 28, 2007; Page B1, Lee Gomes, The Wall Street Journal

Business doesn't always look too kindly on a duopoly. True, there are the occasional twinned rivals that manage to sit happily atop an industry for decades -- Coke and Pepsi, say. But there are also many examples, like VHS and Beta, of pairs of competitors that battle it out in markets where, in the end, people want not a choice, but a single unambiguous winner.

Depending on antitrust regulators in Washington, the market for satellite radio may soon undergo a 2-for-1 deal of its own. In this case, the winner would involve a marriage of two incumbents, XM and Sirius, who have asked the Federal Communications Commission to be allowed to merge. A decision isn't expected for several months.

The request from the companies is, if nothing else, brash. XM and Sirius received permission to set up their satellite networks back in 1997, fully aware of an FCC rule specifically prohibiting the very sort of merger and resulting monopoly now being sought.

Well, that was then, say the companies and supporters of the merger; the technological landscape today is different. Back then, the only alternative to satellite radio was AM/FM radio. Today, competition abounds, not only from iPods and podcasts, and musical cellphones, but from a reinvented broadcast-radio format known as HD Radio....read more: here

Labels: merger, sirius, wall street journal, xm