Monday, April 16, 2007

CNET Comments On Merger

Is Uncle Sam serious about Sirius-XM?
By Randolph J. May, CNET, Apr 16 0

Congress has scheduled another hearing, for April 17, on the proposed merger between Sirius Satellite Radio and XM Satellite Radio. Like all significant mergers, this one deserves scrutiny by the antitrust and regulatory authorities.
Congress legitimately has an oversight role as well.
But keep a keen eye: the way in which this merger is handled will tell much about whether our government officials grasp how dramatically communications and information-services markets are changing.
I am concerned that the Department of Justice antitrust officials and the Federal Communications Commission regulators charged with reviewing the merger do not adopt an unduly narrow view of marketplace competition.
A narrow view might lead them not only to reject the merger, but to maintain in place outdated regulations that have the effect of chilling innovation and stifling investment.
More about that in a moment, but first a few vital statistics about Sirius and XM. Together they offer about 300 channels of music, sports, talk, entertainment, traffic and weather, and other informational programming, many of them commercial-free.
The two operators currently have approximately 14 million subscribers. Despite having paid the government $170 million at auction to purchase the spectrum used to deliver their programming, and having invested billions since in facilities, programming and marketing, neither Sirius nor XM ever has turned a profit in five years of operation...read more: here

4/16/2007 12:28:00 PM

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  • XM and Sirius would be a monopoly and they would have undue influence in the market, namely the ability to set prices for advertisers. This could only have a negative impact on local broadcasters, like the ones I represent as an employee of the NAB in Washington. I'm worried that if the DOJ and FCC doesn't draw it narrowly enough, it'll force these smaller broadcasters out of business.

    By Anonymous walt, at April 16, 2007 2:36 PM  

  • Your arguing that a medium of delivery that encompasess less than 5% of the listenership is going to set prices for advertising?

    It is well publicized that ad rates for Stern (for example) are lower on satellite than they were on terrestrial. This happens because of the audience size.

    Local broadcasters have the local advertising market cornered. I do not hear locxalized advertising on satellite radio whatsoever.

    Business changes over time. Business plans change over time. sometimes it could be a good idea to review your business plan and see what can be improved.

    Now that there is a little bit of pressure from satellite, cell companies and internet radio, terrestrial radio seems to be looking into fewer ads during the course of an hour.

    Offer a good and compelling product and a business will do fine

    By Blogger SSG, at April 16, 2007 2:43 PM  

  • I'm worried that if the DOJ and FCC doesn't draw it narrowly enough, it'll force these smaller broadcasters out of business.

    If you are truly oncerned about the smaller broadcasters, why does the NAB want to relax the FCC mandated ownership regulations? Do you want Clear Channel and CBS to own all the small broadcasters?

    Why is David Rehr so excited about NBC rejoining the NAB? To help the smaller broadcasters?

    By Anonymous Jimmy For Sale Schaelffler, at April 16, 2007 7:25 PM  

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