Mel Karmazin, Sirius's head honcho, wants that merger baaaad. He took to Capitol Hill this week to try to give the merger-to-be a running start toward clearing the significant regulatory hurdles (and doubts) it's likely to face in the coming months. Talking to the antitrust taskforce on the House Judiciary Committee, he revealed that they're "prepared to make concessions, and we're willing to work with the FCC on doing it."
What kind of concessions? How about the one everybody wants to hear: price controls. Yep. He added that they'll "leave it to the regulators" to enforce promises they're making about "more programming and better services at lower prices." Whether or not you trust the regulators is another story though, I suppose.
Also combatting suggestions that the new company would be a monopoly, Karmazin repeatedly emphasized that within the context of the broader market—traditional radio, internet radio and mp3 players—they are not.
There is, I feel, some weight to his argument, as much like it sounds like hot air. I have an iPod—I don't think about satellite radio, though I might if I didn't. There's enough competitive pressure coming in from all sides, it seems, to drive them to keep things balanced, lest subscribers flock elsewhere. Whether or not Congress and the FCC buys that argument remains to be seen.












Comments
The first question is... "why" does he want this so bad?
Forget about regulatory hurdles, the Sirius stock values are depressed because they cannot make money with their current model... XM is not that far behind, but seems to be more frugle with the money being thrown at talent or content. In the end, both companies original models projected profitability at 10mm subs.
That model was thrown out the window when SatRad started competing for "talent" like Howard.
The question then becomes, can one company be viable with 14-18mm subs? Mel knows that one of the two companies will crumble under the weight of the costs associated to their bloated contracts, and Sirius is closer to this scenario than XM is.
Protect the stock holders at all costs... forget about the services and customers, a monopoly protects the revenue stream.
Yea, I'm a little pissed about the merger.
they are BOTH in debt big time.
If they take away the metal station (Hard Attack) on Sirius I'm going postal.
I listened to Martin(inventor of satellite radio) on Howard Stern this morning and found out something interesting. When the FCC decided to split the Sat radio freq. it actually limited it's functionality. If the freq are combined again, streaming sat video will be more capable.
The reason Sat radio is becoming so popular is because of the content. Stern, Baseball, NASCAR. Not canned music that you could play on your iPod.
It's not a monopoly because you don't have to pay for it. There is also free radio. This is not Cable which is a monopoly because I don't have any choices.
I say the merger may be the only thing will save either company. I'm glad I am not a customer of either, but who knows, in the future if they combined thier talent and cut costs, maybe enough people would subscribe that they could turn a profit.
Ehhh, they'll probably go broke whatever they try; too many other ways for consumers to get on-demand programming.
There is absolutely no logical reason why they should not allow this merger. If anyone can come up with one, let me know. Don't give me the monopoly BS. Satellite radio is a pay service, not a necessary commodity. I don't think monopoly should apply. Sattelite radios original patent (Sirius) was supposed to be for a full range of frequencies. The government decided to split it in half and let 2 competing companies have a go at it. I say let them merge and give one company the full range as was originally intended. I want to watch streaming video in my car
I like Inajeep heard Martine this morning too. I'm all for the merger.
They need to require them to offer a 20 station minimum free service that is add supported.
Flawed business plan executed poorly. They them both go down in flames, and let a better business person pick up the pieces for cheap and prosper. They screwed themselves when they thought paying Stern all that money was the path to salvation.
Because here's how this repeats itself. They'll promise great new things like satelite video if they could only merge. Then, they'll decide to pay billions of dollars to woo talent to that channel, then they'll go bust again.
Side note: satellite video already exists for your car... http://www.mobilevideo4less.com/tracvision.html
I signed up for Sirius to follow Howard over, but I haven't listened to the show in over 6 months because it hasn't changed one iota since the switch.
I find the music channels to be awesome because they play music that ISN'T on my MP3 player.
Okay and the Jack Benny Program on Sirius Radio Classics is kinda funny too.
Man, that guy was cheap!
God forbid the FCC "protects" us from the ramifications of a combined company, thereby preventing better programming choices for consumers and profitability for shareholder.
The only way this market is profitable is if they combine operations and spread their considerable fixed costs over a wider user base. The Stern deal was insane money, yes, but an act of desperation to get subscribers over to Sirius. And guess what: it worked. A combined company will be in a much better position to market premium content that you can't replicate via mp3/podcast/etc.
And if they get rid of Cinemagic, I'm dropping my XM sub. It's one of the few channels that is completely unique to XM (Sirius doesn't carry anything close). All the other music channels have Sirius equivalents... as are all the other channels.
@strider_mt2k: I really disagree. I think the Stern show is better than it's ever been and has really hit it's stride on satellite.
1) Anti-monopoly laws do NOT apply only to necessities.
2) Based on Karmazan's reasoning, it would be fine to allow only one automobile manufacturer, because there are also motorcycles, buses, bicycles and trains.
Lower Prices Mel? Two Words!! Bull SHIT!
You, Mel are a Business GENIUS, and a Bull Shit Artist. I worked for you! And you're still the best at Shoveling Manure to your employees and the stockholders. Stern 500 Million? How about Darfur or hell… Flint, Michigan, or Louisiana? Mel, go to hell!
Your merger testimony was only missing one thing… a PIG SUIT.
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