Apparently the industry is tired of talking about the potential alliance between General Motors and Nissan/Renault, so we've moved on to a new potential alliance, that of Sirius and XM. Both companies comprise the only players in the satellite radio business, so if the two were to pair up the resulting company would have quite the monopoly. It's not a monopoly of much, as neither company has been able to turn a profit since each began. Speculation about a possible pair up began when Sirius Satellite Radio CEO Mel Karmazin told a group of investors that "we'd love to buy" XM. That's a pretty bold statement considering XM has 7 million subscribers to Sirius's 4.7 million. As we reported, Sirius is closing the gap thanks to its acquisition of Howard Stern in January, but is still a ways off from surpassing XM's subscriber base.
A Sirius/XM two-headed monster would serve to protect both companies against the onslaught of new technology that threatens each. iPods, cell phones, and various digital music devices are all competing for similar consumers. Both satellite radio companies have new-vehicle buyers to thank for the bulk of their subscribers, so if Apple wanted to deal a crushing blow it'd start giving away Nanos with new car purchases. Somehow we doubt that's ever going to happen.
[Source: AutoWeek]
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Reader Comments (Page 1 of 3)
Tyre @ Jul 12th 2006 8:10PM
read some orbitcast figures before you post like this. Stern has done little for Sirius. He may do more later but the "Stern Effect" only lasted for 2 months and it had a very small effect over all.
mike @ Jul 12th 2006 8:26PM
The reason I got XM is because I cant stand Stern. No talent loser. Albiet rich loser.
Kevin @ Jul 12th 2006 8:41PM
Actually, I work at an Acura dealership and we ARE giving away iPod Nanos with new cars, even though most already have XM as well.
doglet @ Jul 12th 2006 9:13PM
i had xm for a while, i let my subscription run out because i couldnt find a station that played good music. there were 3 or 4 that had a good song 1/5 but thats not good enough. i found a local inde radio station that played good music and that was that. if only xm had 94.9 without commercials i would have gladly paid the monthly fee but it was not to be. if their product was better they would still be making money off me.
Jonathan @ Jul 12th 2006 9:23PM
I know someone who just bought a Lexus IS and got a free Nano.
Jaymez @ Jul 12th 2006 9:26PM
Sirius is a way better service than XM. Stern only has his two channels, you know. I bought Sirius as an impulse buy at a truck stop and I've never looked back. I have three recievers and only one truck. The music is better on Sirius. They have real metal stations. They have an awesome selection of music, comedy, and talk channels. In all, they rock.
XM is more for those with odd-ball music tastes and those who prefer B-side tracks.
All my future vehicles will have Sirius in them. It won't be factory installed, since the plug and play units are better (more features, easily upgraded without replacing the Head Unit) and Sirius doesn't have a contract with GM yet.
Oh, and neither service is commercial free. Sirius is 100% commercial free on the music channels only. Promos for other channels, shows, and up comming events on Sirius don't count in my book.
XM is commercial free on MOST music channels. They have a few music channels (4 maybe) that run commercials as well as running them on all news,talk,sports channels.
the friendly grizzly @ Jul 12th 2006 9:29PM
I just got an XM device for my truck. I went with XM because I refuse in any way to write any part of Stern's paycheck. I like jazz, 1940s music, old radio, comedy, and classical. I get what I want, and even on the stations with commercials (Fox news, etc), the ads aren't as offensive and juvenile as commercial radio.
Rob @ Jul 12th 2006 9:39PM
I love my XM. The whole reason I got it was for the all punk station it has. Not like the Sirius rap/punk mix (what's that about!?!). I love having it, because I finally have access to a station that plays music I love! Also, being able to listen to the audio feeds from the cable news stations is actually really nice for the morning commute.
hmmm @ Jul 12th 2006 9:43PM
Me and a group of my friends + coworkers all have satellite radio, some xm, some sirius (sirius rocks) and we all agree that if these 2 companys merge not one thing will change in the way of programming or any noticable difference to the 2 brands just all the cash will go to one single company instead of 2, the reasoning behind this is all the djs and all the songs that are already paid for and all the programming is basically set, they just repeat songs every 24 hours or less... sooo if this might be true i hope it dont happen cause competition keeps the pot stirred if there is no competition they wont care about new things or changes in programming or fighting over your hard earned dollars !!and basically say f-them we already got there money !
dakboy @ Jul 12th 2006 9:55PM
Karmizan did not say that Sirius wants to purchase XM. From http://www.msnbc.msn.com/id/13773302/site/newsweek/: "I was asked the question. I answered it honestly. Certainly I'd be interested if a company is for sale, if the price is right and if regulators would allow it. In the case of satellite radio, it's hard to argue that strategically [buying XM] would fit. It's not something we're pursuing."
Note that last 2 sentences. There's no strategic reason to purchase XM - IOW, XM doesn't have anything that Sirius wants, or that Sirius can't get.
Sirius added twice as many subscribers as XM did in the second quarter. They've been crushing XM's growth for several quarters now. Stern is only the beginning. As of 2007, there is only one professional sport that XM will have exclusively - MLB. NASCAR, NHL, NFL are all on Sirius (the last 2 are already Sirius exclusives. NASCAR switches after this season). The content producers are hitching their wagons to the horse they think is the best platform.
That sports contingent draw far more subscribers than any one entertainer/DJ/shock jock. My brother was gung-ho about XM, but if MLB ever goes to Sirius, I'm fairly sure he'll switch.
I thought I was getting Sirius for only 2 reasons: NFL and Stern. Then I discovered all the other great programming. I'm literally overwhelmed with choices.
Why must every discussion about Sirius come down to "Stern's a jackass" for some people? It's quickly approaching a Goodwin's Law for the 21st century. If you don't like him, don't listen to him. It's that simple. He's 1.5 channels out of over 120. Choosing XM over Sirius only because Sirius has one program that you don't like? I could make the same argument about Opie & Anthony on XM (who, BTW, can't draw, managed a paltry 35,000 listeners and had to go crawling back to FM in conjunction with the XM broadcast), but it would be similarly ridiculous. Why not choose the service based on the programming you WILL listen to instead?
Tim P @ Jul 12th 2006 10:14PM
I have XM. I wish either Sirius or XM wouldn't compress their channels so much. I love the content, but hate the quality.
the chad @ Jul 12th 2006 11:09PM
Will Sirius & XM Merge?
No.
Case closed.
Besides, would it even clear anti-trust regulations? It would be the only corporation of its type and have a pretty hefty monopoly. Of course, then again, it wouldn't happen anyway.
Neal M @ Jul 12th 2006 11:14PM
Sirius and XM will not merge. If they do, it will only lead to their demise. Mark my words. Without competition, and a huge deficit in operational costs, they stand to be pushed by their already-lackluster management to drive up income (that's biz-lingo for PRICES) and end up pricing themselves out of the thoughts of American (and now Canadian) consumers. Competition is what makes things great, if they want to be great they need to remain alone and try to COMPETE.
sr20de @ Jul 12th 2006 11:32PM
Cable didn't have commercials once. Satellite radio will have regular commercials after they start turning a year-in-year-out profit (assuming they ever can).
Kurt Binnie @ Jul 12th 2006 11:35PM
Hahahahah..free Nano when you buy a Lexus. That's a bigger joke than the "free" tank of gas.
Rob @ Jul 12th 2006 11:46PM
Hey Mike are you jealous of Howard Stern's success? This so-called "no talent loser" has quite the following as 25% of his prior audience are now paying to listen to him. The "Stern effect" added over 1 million subscribers in Q4 of 2005 ALONE. "Very small effect overall"-whatever you say, Tyre.
Tim @ Jul 12th 2006 11:51PM
I have XM myself (aftermarket), but I think that the music offerings are only marginally better than regular radio - like one of the other posters said, too many B-side tracks and not enough "hits". The real reason for satellite radio is Talk - whether it be News, Gossip, or Sports - they have really great talk radio programming on both XM and Sirius. I doubt that they will merge, but if they did it would be a good thing - *not* because of any synergies they would get from eliminating duplicate programming, but because they could essentially double their content for no more cost. They could remove the "format war" problem that is probably one of the things that is keeping some people off satellite - imagine if one service had ALL major sports, ALL your favorite shock jocks, ALL the news stations and 2x the music of current satellite radio.
Matt A. @ Jul 13th 2006 12:13AM
Not going to happen. Mel said that he'd be interested in buying XM, but the cost would be a concern.
No shit. Hey, I'd like to buy XM, too. But the cost would be a concern - as in I can't fucking afford it. Neither can Sirius.
Bill @ Jul 13th 2006 12:13AM
#4, I understand your point, but most people get XM (or Sirius) because they can't find an *FM* station that plays "good music". To many people who live in crappy radio markets, satellite radio is a godsend.
I live in the Washington DC area, and it's the worst big-city radio market in the entire US. Your choices here are basically limited to political talk, religious talk, all-news talk, Rap/Hip-Hop, Country, Spanish, and lame oldies pop. There's really no rock/pop, and what there is they talk too much and cater to an older demographic. Plenty of colleges in the area, but no college radio/alternative, or independents. It's all totally corporatized, canned radio from Clear Channel and Bonneville. We even have multiple NPR stations that play the same programs simultaneously, which makes no sense.
#17, I see your point, but again it depends on the market you live in. I already have access to too much "Talk", so I got XM so I could finally listen to music again. And I'm finally hearing new music and buying CDs and downloads again.
(Sadly missing 99.1'HFS, from the old days...)
Billy @ Jul 13th 2006 12:13AM
who cares what the station would sound like after the merge.
IF and a big if they ever do merge, I'm taking my profits and say seeee-ya
(thats for Ron and Fez on X/M)
I dont have either, but have Siri stock for 2 words only...Mel Karmazin
I was a Stern Listeneer when he was great and Infinity Broadcasting was a tiny blot on the radio map. Mel's office was right down the hall from Howie and wasn't even allowed to say his name on the air.
He took that and parlayed it into Infinity radio, the 2nd largest cluster behind Clear Channel, before it was bought by CBS and ruined by Redstone
adios
Billy