Jimmy Schaeffler, Senior Analyst and Chairman for the Carmel Group, is quoted in The Denver Post as saying that a satellite merger makes "a ton of sense."
Now mind you, he's not talking about Satellite Radio... he's talking about Satellite TV (DBS). But that's precisely my point.
"All of a sudden with the telcos involved, you have competition," said Jimmy Schaeffler, senior multichannel analyst for the Carmel Group. "It (a merger) has always made a ton of sense. ... Look at the billions they spend in redundancies."
Note that The Carmel Group has said they have a record of opposing mergers that they deem as "anti-competitive" such as the proposed Sirius-XM merger. They point to their similar opposition to the DirecTV-EchoStar merger as an example of their historical stance.
The DirecTV-EchoStar merger was rejected just 4 years ago. And in this increasing fast-paced media environment, a lot can change in those four years.
Verizon is aggressively rolling out its FiOS TV service, and now has around 500,000 customers. AT&T's U-verse service has more than 40,000 customers in 23 markets. These are two companies that have a massive existing consumer base that they can easily upsell these new services to. With the telcos involved, Schaeffler now appears to see viable competition for both satellite and cable TV providers.
And that's video based services.
Audio services require far less bandwidth, and so the barrier to entry is much lower than video. Take a look at Muzak and DMX - and soon Slacker - who all utilize existing satellites to broadcast their audio content. A company doesn't need to launch satellites to be a satellite player. (That's ignoring the IP-based services from mobile providers... and is there really any difference between 1,300 HD Radio stations and DARS repeater towers?)
My point is that The Carmel Group took the position of opposing the EchoStar-DirecTV merger using the same short-sighted logic that they're applying to the Sirius-XM merger. (Let's not forget: they also took a completely different position on "competition" in a non-NAB commissioned report.)
So what happens in the years to come?
Funny thing is, when the Carmel group isn't being paid, they seem to make a lot of sense. I agree with them that there is A LOT of competition out there to compete with sat. T.V. Even more competition exists for sat. radio.
While I appreciate those who are against merger, and their hope that everything would "just stay the same." That a very short-sighted view of sat. radio. Competition is just going to get greater and greater for XM and Sirius and they still haven't made a buck. Let them merger and survive and be competitive against these new adversaries.
I used to think Schaeffler and the Carmel Group had credibility. I will admit it, I was wrong. For some reason this story reminds me that I need a pair of flip flops.
Caramel is good on ice cream...
that's nice...but i'm going to wait and see where the hot fudge lobby stands on this before i weigh in.
So it seems there is a lot of competition going on in the TV marketplace. And that's a bad thing why? These companies should be merging why? Because it saves them money but gives no benefit to the consumer? Competition always benefits consumers, mergers benefit only the companies merging. Competition encourages innovation, monopolies stifle it. Saying I now have a choice between getting TV from cable, satellite or phone companies is great. Why would we want to have them merge so we have less choice?