XM and Sirius Promise Cheaper A La Carte Offerings if Merger Deal is Approved

Illustration for article titled XM and Sirius Promise Cheaper A La Carte Offerings if Merger Deal is Approved

Picking and choosing your favorite stations on XM and Sirius Satellite Radio might be a delightful result of the merger between the two companies, at least that's what the companies are saying will happen if their proposed deal goes through the FCC gauntlet. That's just the beginning, too, because the companies add that their subscriptions will cost 46% less. Here are a couple of examples the companies announced today.

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How about 50 channels of your choice from either XM or Sirius for $6.99 per month? The two companies also say you'll be able to add additional channels for 25 cents apiece. This is a far cry from the $13 a month Sirius and XM subscribers are paying now.

The companies are gunning to get this merger done before the year is out, and they're trying to calm down complaints that the result would be a monopoly, leaving a company that could charge whatever it wanted for its one-of-a-kind services. One thing we're wondering, though: What's going to keep this monopoly service from raising its prices as soon as it gets regulatory approval?

We're now paying $13 a month for Sirius Satellite Radio, and find that to be an excellent value, considering the high quality of its radio stations and high fidelity of its signal. For $6.99 per month, we're thinking this new service would be irresistible. No wonder old fogy radio companies are opposing this merger so strongly. Bring it on. [Reuters]

DISCUSSION

Why is "everybody" so happy to let cable companies have local monopolies, but there's so much trouble with letting a new service (the satellite radio) do something similar?

As it stands now, 99% of the country thinks having cable is a requirement for life...which really does give a cable company free license to jack up rates. The fact that cable companies are often the *only* broadband internet option in many areas only worsens the problem.

On the other hand, most people are still accustomed to free OTA radio, which actually creates a motivation for Sirius/XM to keep prices low (for the time being), whether or not they have a monopoly. Low prices and good service are the only things that will win over all those people who still get their radio OTA.

In other words, let the Sirius/XM deal happen, and force cable companies to break up and compete.