An article in BusinessWeek goes through some of the possible downsides to this match made in heaven, one of which is most notably - a slowed growth in subscriber acquisitions.
Researchers at IDC had previously estimated the satellite radio industry to reach a combined 22 million subscribers by the end of 2007, but now with the widely publicized merger announcement they're concerned that they miss this target.
Subscribers may be less incline to sign up "given the uncertainty around the merger and availability of service on an ongoing basis," says Susan Kevorkian, an analyst with IDC.
Add to that, concerns for raising prices (as a "monopoly") might deter would-be subscribers.
But the slowdown may occur on the automotive adoption side as well. Satellite radio is an industry that is largely dependent on another industry, and if automakers hold off in adding additional satellite-equipped models, it could prove disastrous.
This last point is absolutely something within the control of both XM and Sirius though. The company's respective OEM departments are obviously working overtime to help keep automaker's concerns at bay.
But from a retail standpoint, a channel that has seen a 46% year-over-year decline in the month of December, it may be necessary to qualm the concerns of would-be subscribers. In fact, the upcoming season may be an opportunity for consumers to take advantage of the industry's response to concerns. Discounts and incentives could very well be on the horizon and retailers may want to promote the fact that these receivers would be "future compatible" with whatever service lies ahead.
This is why Mel and Gary need to issue some type of statement that reassures current and potential subscribers that if/when the merger is approved, you still will be able to use your current equipment to enjoy the entire new channel lineup. If consumers know this, it should not stop them from buying; and if auto makers know this, it should prevent them from considering holding back on new installs.
Also, Mel and Gary need to issue some type of joint statement that retailers can use (such as an FAQ) to answer questions of potential subs.
XM & Sirius didn't seem to think things through on this deal. They should have waited until the hardware that supports dual usage was already on the market. It's this kind of bad planning that hints at what a disaster this merger is going to be for everyone involved, and really shows that any promises they are making now are probably going to be forgotten post merger.
Had I known that this was coming, I would not have upgraded my equipment. I won't be buying any new sat rad gear.
The problem is they've already made a statement that new equipment WILL be necessary. They are just saying that new radios won't be needed in the near future...That is until they've worked out the details of this new arrangment. After that, existing equipment will be obsolete, and will be need to be replaced with dual usage radios that can recieve both networks.
Man-Rob...XM & Sirius didn't seem to think things through on this deal. They should have waited until the hardware that supports dual usage was already on the market. It's this kind of bad planning that hints at what a disaster this merger is going to be for everyone involved, and really shows that any promises they are making now are probably going to be forgotten post merger.
YES INDEED YOU ARE SO RIGHT !!!
If the above is a true statement, say bye bye to Sat. Radio
It's a hail-mary: if the merger is approved the satrad industry will be "saved" and if the merger is not approved one or both companies will fail.. at the expense of the current subscribers, they will cut their losses and try to move forward with the "new" fan base.. the people who don't own satellite radio right now.. charging twenty to twenty-five dollars a month for the programming that will become so sub par that the industry will wonder what happened when satrad becomes a thing of the past.. what satellite radio did was spend themselves into this situation and now that sirius has all but caught XM in subscribers, XM is now gonna throw in the towel and admit defeat.. this is a truly sad day for all satellite radio believers.. THE DEATH OF SATELLITE RADIO... oh well I enjoyed it while it lasted but... R.I.P. XM sirius ....
Plowboy1 wrote:
"Man-Rob...XM & Sirius didn't seem to think things through on this deal. They should have waited until the hardware that supports dual usage was already on the market. It's this kind of bad planning that hints at what a disaster this merger is going to be for everyone involved, and really shows that any promises they are making now are probably going to be forgotten post merger.
YES INDEED YOU ARE SO RIGHT !!! "
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You mean you didn't know this already? Why do you think people like myself were saying that the synergies won't currently work? The cost "savings" will be crushed by these guys not thinking this through BEFORE the merger. We also have two incompatible CODECS as well (which means one whole set of receivers HAS to be eventually replaced if no dual-channel receiver come out). Another battle they will have to do before everything is settled.
There was one analyst that pulled some "7 billion" dollars in synergies (and conveniently leaving out a time-line at that) literally out of his ass.
7 billion in synergies, yep, maybe in 2028. If these companies are around that long.