It seems like forever ago when rumors started about a merger between Sirius and XM satellite radio. The rumors were made slightly more official when the two companies announced the "merger of equals" last year. Where have we heard that before? Nobody expected this $4.2 billion transaction to be a sprint, as there are laws with tall hurdles designed to govern this type of business deal, but this conjunction has creeped like an overloaded Tercel up a steep grade.
For more than a year we've been sitting around watching these two companies as they worked on securing shareholder approval (accomplished in November) and the endorsement of regulators (um, not yet). Now we're getting word from Sirius CEO Mel Karmazin that there may be an end in sight. During a talk at the Bear Stearns 21st Annual Media Conference, Karmazin said he "took heart" in recent FCC comments that mentioned that the body aims to rule by the end of March. "The fact that it has lingered this long, it has been interpreted... as good news," Karmazin said. Gary Parsons, Chairman of XM Satellite Radio, added that he was also confident the Department of Justice and the FCC were moving forward "...in a timely manner."
With satellite radio in need of some more customers, let's hope they can quickly put this merger in the books and focus on more important issues like signal reception and more varied content.
Apparently, the idea of paying for radio chatter doesn't hold much appeal to customers who actually have to shell out hard earned cash. While many new cars today come equipped with stereos that are capable of receiving either XM or Sirius, fewer people than ever are buying standalone receivers. In December, retail sales of satellite receivers were down 37.5% (36% for Sirius and 41% for XM) compared to 2006.
This might in part be due to the fact that without an external antenna that has line of sight to the satellite, the radio usually doesn't work indoors. There's also the quality of what you hear on the stations. Unless you have a compelling need to hear Howard Stern unfiltered, most of the rest doesn't sound much different than what you can hear on terrestrial radio. At this rate, XM and Sirius better hope their merger is completed soon before they both run out of cash or customers.
The satellite radio option is about as common in new cars as the near-omnipresent AUX jack for portable music devices. You can argue that the presence of the latter essentially eliminates the need for the former, but some people like being able to tune in to a radio station where there's the outside chance of hearing songs they may not necessarily own yet. Most luxury marques, from Audi to Rolls-Royce, already have the satellite base covered. So it was a bit of a surprise to learn that Ferrari hadn't gotten into the game. That's over though, as Modena has selected XM as its extra-terrestrial radio provider of choice. The first car to get it is the 612 Scaglietti, which is fine and all, but we can't figure out why anyone would want yet another audio source to compete with the sweet music made by the car's V12. At least the NavTraffic feature can help keep the Ferrari on roads whose conditions allow it to maintain a proper pace.
I've always chosen an iPod over ordering either of the two satellite radio providers, XM and Sirius, for one simple reason: I can listen to only what I want. With satellite radio, you pay a monthly fee, around $13/month, and get a bunch of channels, most of which I've found I'll pass right by on the dial. The thought of paying for dozens of channels I don't like just never thrilled me.
Thanks to the upcoming merger between XM and Sirius, however, my biggest complaint with satellite radio might soon be gone. According to the companies, two new a la carte plans will be offered about a year after the merger goes through. The first will cost $6.95/month (very reasonable) and allow a subscriber to pick 50 channels from either XM or Sirius. Unfortunately, with this plan you can't mix and match Howard Stern on Sirius with Oprah on XM. Step up to the $14.95 a la carte plan, however, and you'll be able to choose 100 channels on either service. These are great options and in our estimation deliver a better product to the subscriber than either satellite radio provider ever did on its own.
There will be more plans revealed ahead of the merger's conclusion, and the companies say that those who own either XM or Sirius branded players right now will be able to receive some stations from the other service, but not all. No list of which stations are excluded from each service's hardware was given at this time, however. Receivers sold after the merger, we're sure, will be able to tune in the gamut of stations offered by both providers.
We had an idea that the XM/Sirius merger wasn't exactly going to be a win for the customer, and now we hear that XM and Sirius will be offering tiered pricing with plans that are both lower and higher-priced than their current $12.95/month service. Certain "a-la carte" plans will actually come in at a price below existing rates, which should fit the needs of a select few subscribers. There will still be a $12.95 package, with what Sirius described in a federal finding as "substantially similar" offerings to what customers are getting now for the same price. The soon-to-be merged companies will try to build additional revenue with upper-tier packages that will give customers more than what they're getting now, for less than the cost of getting both services.
Senator Herb Kohl (D-WI), chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, said that the merger could be a "real bad deal" for customers, and with this news, we tend to agree. When the two companies were fighting each other for subscription dollars, they gave us everything they could afford and some things they probably couldn't. If the merger is approved (and how often are they not) the combined company will slice and dice service cable tv-style, and customers will be left to either compromise what they really want in the name of price, or simply pay more for everything. Monopoly is more fun when it's the board game. We're not exactly political activists, but if you think this sounds like a bum deal, you can always send Senator Kohl a note.
It's like Pandora for your car! Slacker, a new web-based radio website has just launched this week. The channel selection is very similar to what's available on XM or Sirius, and we liken it to Pandora because the number of songs you can skip is limited, but the selection is large and the experience is flexible and customizeable. The website alone is a nice little diversion anywhere you've got a browser and bandwidth, but the exciting news is that there will soon be an iPod-like device so you can take your Slacker with you. That means never having to listen to the angry guy talk channel while stuck in a traffic jam again. It's also better than the four-song playlists each FM genre now spins, too. The portable device will store songs, and later this year Slacker will be unveiling a car dock that will be able to receive music from satellite signals.
Pulling down music from the birds is the same trick that Sirius and XM manage, but they cost money. Slacker is free once you purchase the hardware. How is that possible? Why, the very same way broadcast television and radio are free: advertising. If you're willing to sit through some ads, you get free music. In fact, the music is merely there to keep you interested enough that you'll continue to listen through the spots – of course, many of us are obsessive channel flippers (or worse yet, NPR junkies). You can have your Slacking and no commercials, too. For about half the price of Sirius, your $7.50 per month will keep the music rolling in and offer you unlimited skips and no ads. The price is so much lower because Slacker doesn't have big loans for satellites to pay off. The quality is in the MP3 realm, and sounds decent, which is encouraging. Some of us with finely tuned ears have a hard time listening to SatRad because of the digital compression artifacts. We'll see what happens if Slacker is able to popularize it's offerings, and deliver on the promise they're dangling tantalizingly in front of our noses.
There are a lot of questions surrounding the proposed merger of competing satellite radio providers XM and Sirius. USA Today had a chance to ask a few to Sirius CEO Mel Karmazin, the would-be CEO of the two companies if the merger is allowed to take place. Below are some bullet points from the interview with answers to the most burning questions.
Fees would not likely be raised above $12.95/month
Dual receiver radios will likely be available that can receive both XM and Sirius content
People with radios that receive only one service can continue to receive just that service
Both brands and services will remain intact
Live, real-time satellite television will be offered
It's still not clear to us, at least, how exactly this merger will work. Karmazin says that content from service will be available to subscribers of the other service soon after the merger goes through, but it isn't clear whether those subscribers will need to purchase a compatible receiver, perhaps a dual receiver, or if XM channels will be broadcast across the Sirius network and vice versa. We'd also like to know what effect the merger will have on automakers who have already aligned themselves with one service and have been installing Sirius or XM receivers in their vehicles for years now. Clearly there are cost savings that can be realized, otherwise the merger would never have been proposed, but we're wondering if the imminent confusion caused by the merger will hurt the two brands in the long run.
Being the pundits we are, we have plenty to say in Autoblog Podcast #58. We start right off addressing the rumors of a GM/Chrysler deal, and offer myraid reasons why it's not a good idea yet may be justifiable to some folks. We move on to flogging the VW/GM suicide commercial debate for a little while, which sets the stage for us discussing the Daytona 500, naturally. It's also revealed that John's on board to give NASCAR as much of a chance as he can stomach this season. So far, that amounts to about an hour and a half before the siren song of video games becomes too loud to ignore. Wrapping up, we trade opinions on the Maserati Coupe and the Audi A5 before touching briefly on the impending XM/Sirius merger. It's chock-full of good stuff this time around, so enjoy the 'cast! We'll try and have an enhanced version with video up for you as soon as possible.
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Both XM and Sirius have been dropping hints since last summer that the two could merge into one giant satellite radio provider with a subscriber base of 12 million. It appears after a marathon negotiation session last weekend, the two are finally ready to make it offiicial sometime today and start the long process of gaining SEC approval. Though approval will likely take over a year, we doubt the feds will break this one up. While XM and Sirius technically compete with each other for subscribers, satellite radio as an industry is in a fight for its life with other forms of audio distribution, like regular old terrestrial radio, internet radio and the 800 lb. gorilla, Apple's iPod. These two company's have a better shot at surviving by jumping in the same bunker.
Of course, auto interiors are the primary front in this war, which makes the merger interesting to us. Car owners subscribed to one of the two services will be the big winners, as Howard Stern and Oprah will now occupy the same dial. You'll be able to get all your satellite radio sports coverage with one subscription now, as well.
Trying to meld two established brands into one, however, is not an easy thing to do. Just ask DaimlerChrysler if you need a reference. We chuckled out loud while reading the linked article from the New York Post when the author describes the deal as a "merger of equals". Sure...
In a gesture of unwavering generosity, Cadillac announced yesterday that select 2007 models would come equipped with free satellite navigation. The offer will end on January 2nd 2007 and is only available on "specially-equipped" models.
What directional joys await those of you willing to drop the coin on a new Caddy? It's pretty much the standard navigation fare, with a dash-mounted LCD displaying turn-by-turn directions, with the option of a sultry vixen barking orders at you if you make a wrong move (some don't need a sat-nav for that). Other standard features include an address finder, a business search and, for those of you willing to upgrade to XM, NavTraffic, that provides real-time traffic reporting.
The free navi will be only available on 2007 models and we haven't found out the meaning of "specially-equipped" yet, but we'll call our local dealer today.
The satellite radio option is about as common in new cars as the near-omnipresent AUX jack for portable music devices. You can argue that the presence of the latter essentially eliminates the need for the former, but some people like being able to tune in to a radio station where there's the outside chance of hearing songs they may not necessarily own yet. Most luxury marques, from Audi to Rolls-Royce, already have the satellite base covered. So it was a bit of a surprise to learn that Ferrari hadn't gotten into the game. That's over though, as Modena has selected XM as its extra-terrestrial radio provider of choice. The first car to get it is the 612 Scaglietti, which is fine and all, but we can't figure out why anyone would want yet 
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