BusinessWeek has published an article about what the XM, Sirius merger "won't fix" in terms of the basic business model. Essentially they're saying that the model is flawed.
It's an unfortunate conclusion that many people seem to be taking as a result of this merger, and concern I voiced in the height of all the merger rumor hub-bub. The feeling is that the merger isn't in the pursuit of "synergies" but rather as a result of the business model being screwed up.
The notion, as stated in the article, that satellites are a "soon-to-be obsolete method of delivery" is absolutely ridiculous, but it does lead to a thought that I hope XM and Sirius realize. That they're both not in the "satellite" business, but rather in the "content" business. Who cares how it's delivered, just that it's delivered.
But... maybe that's the whole point of the merger.
[BusinessWeek]
Thanks to everyone who sent this in!
The FCC chairman spoke yesterday and I'm surprised nobody
picked up on his comments specifically relating
to outmoded FCC rules in relation to the current
marketplace. ( Hint Hint , Sirius/XM license was granted
10 years ago and the competition today warrants a merger)
I say he agrees with former FCC chairman Powell and
a merger should happen
http://hraunfoss.fcc.gov/edocs_public/at...
You got it Ryan! Howard, NFL, MLB, Nascar, Oprah factory installed in every car in this country. All 230 million of them that are on the road. How can a consumer pass it up? They can't! 20 million subs in 2008. 100 million subs within a decade.
Combined content delivered to cars, phones, mp3 players, homes, offices, internet.
3 rules in media in this order - content, distribution, consolidation. Sirius/XM has all 3 now.
Watch out MUSCLE13, you didn't mention O&A. The O&A Army will attack you now!
Mel Karmazin has been wrong. He purchased 1,000,000 shares @ $6.208 on 2006-01-12 and then another 1,000,000 shares @ $4.468 on 2006-05-30, and now the stock is worth $3.74. People have been disappointed and I doubt this merger will help much on the share prices.
http://www.secform4.com/insider-trading/908937.htm
Muscle13 wrote:
"
You got it Ryan! Howard, NFL, MLB, Nascar, Oprah factory installed in every car in this country. All 230 million of them that are on the road. How can a consumer pass it up? They can't! 20 million subs in 2008. 100 million subs within a decade.
Combined content delivered to cars, phones, mp3 players, homes, offices, internet.
3 rules in media in this order - content, distribution, consolidation. Sirius/XM has all 3 now."
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Not to burst your bubble and be negative, but take the rose colored glasses off. The MAIN reason these guys are merging is because they AREN'T going to have 100 million subs in a decade.
Competition right now is big, and will get fiercer if Wimax or another technology swoops into cars. Two pieces of content rule radio, even today: Talk and commercial-free music. Both are available free, even with the impending HDRadio (which will be built into every car soon), and when other technologies like Wimax become available. ALL other content on radio (yes, even Stern, who's done in 3.5 years anyway) is secondary. The "100 million" subs march is long over, and XM and Sirius know this.
As much as I love SDARS (hence my name), I see the writing on the wall, and so do they. Technology is changing too fast now.