There's something I would like to briefly highlight from a previous post, that I think deserves a post of it's own. And that is that CBS Radio (and other broadcasters) actually have already defined the competitive landscape in their SEC filings.
Here's a snippet from CBS's 10-K (with emphasis added):
Radio Competition.
The Company's radio stations directly compete within their respective markets for audience, advertising revenues and programming with other radio stations including those owned by other group owners such as ABC Radio, Clear Channel Communications, Cox Radio, Emmis Communications, Entercom and Radio One. The Company's radio stations also compete with other media, such as broadcast, cable and DTH satellite television, radio, newspapers, magazines, the Internet and direct mail.
The radio industry is also subject to competition from two satellite-delivered audio programming services, Sirius Satellite Radio and XM Satellite Radio, each providing over 100 channels of pay digital audio services. Sirius and XM sell advertising time on some of their channels and compete with the radio industry for programming.
The Company's radio stations face increasing competition from audio programming delivered via the Internet and from consumer products such as portable digital audio players. These new technologies create new ways for individuals to listen to music and other content of their choosing while avoiding traditional commercial advertisements. An increasingly broad adoption by consumers of portable digital audio players could affect the ability of the Company's radio stations to attract listeners and advertisers.
The statements made in these SEC filings would constitute admissions under the law. So they can't just go ahead and oppose a proposed market definition, or to just limit it to the satellite radio market (making it a 'monopoly'). They would look pretty damn silly if they try to contradict themselves.
The biggest "hurdle" in the merger is the definition of what is a "relevant market" and what constitutes a competitive marketplace. But CBS Terrestrial Radio has actually already adopted the same definition that XM and Sirius are advocating.
This is pretty big stuff in my opinion, and I hope the media picks up on it.
UPDATE: Thanks to the work from several commenters, the 10-Ks from Radio One, Cox Radio, Entercom, and Clear Channel all also define the relevant market as including satellite radio as well as other audio entertainment sources like Internet radio and DAPs.
Well you posting that snippet already helps the media find it.
As to the "relevant market" terminology I we all know that terrestrial radio is not relevant anymore ;)
Damn this website is getting even more addicting by the hour.
The only thing that concerns me is that the FCC might use the competition with terrestrial radio argument to try to implement censorship rules for sat radio
The more I think about this merger, the more I'm against it...but proud of the two for standing up to the NAB and redefining what the market/competition really is. If nothing more than a re-definition of what the competitive market between iPods (etc.), AM/FM radio and SatRad truly is, then I say, "Job well done."
Ryan,
FWIW, I'm not defending here -- but CBS is NOT a member to the NAB, has not commented in the past about satellite radio and has not officially commented recently about satellite radio. Suggesting, look for the same comments from CCU, Entercom, Emmis, Cox, Regent, Radio One and others...
Again, not defending... but CBS is not the best example. They already "partner" with XM. CBS willingly dumped the NAB about 8 years ago, because of many differences of opinions.
Ryan - Right after you posted this a caller to Jim Cramer's Mad Money on CNBC mentioned it tonight. He had to have read it here. Good job.
Following up, I've already found similar statements by Entercom, Radio One and Cox Radio -- all members to the NAB. Spelling out the marketplace to them.
Check these links and search for "satellite". You'll find even more details:
Radio One
http://www.sec.gov/Archives/edgar/data/1041657/000095013306001299/w18606e10vk.htm
Cox Radio
http://www.sec.gov/Archives/edgar/data/1018522/000119312506044799/d10k.htm
Entercom
http://www.sec.gov/Archives/edgar/data/1067837/000110465906011928/a06-1866_110k.htm
CCU 10k -
We compete in our markets with all advertising media, including satellite radio, television, newspapers, outdoor advertising, direct mail, cable television, yellow pages, the Internet, wireless media alternatives, cellular phones and other forms of advertisement.
http://www.clearchannel.com/Investors/Documents/229.pdf
Good job MUSCLE13.
This is not going to be easy for the new SIRIUS. The NAB has more Senators, Congressmen and Judges in their pocket than the Godfather. It's going to get real ugly before it gets pretty.
My 2 cents for the peeps that think the merger is bad for the consumer: YOU CAN CANCEL! With that in mind, do you think the new SIRIUS will provide content, services and pricing that will make you want to do that?
"This is pretty big stuff in my opinion, and I hope the media picks up on it."
This IS big stuff, but more importantly, stop putting yourself down. You are the media too, especially now that other outlets are quoting you as a source (and even quoting the comments). You can differentiate them as "traditional media" or "old-fashioned media" or "terrestrial media" from now on.
Ryan and Rich - You gotta take a look at this one!
Entercom 10K
We Must Respond To The Increased Competition For Audio Distribution And The Rapid Changes In Technology, Services And Standards That Characterize Our Industry In Order To Remain Competitive.
The radio broadcasting industry is subject to rapid technological change, evolving industry standards and the emergence of new media technologies and services. There is increased competition for audio distribution. These new technologies and services, some of which are commercial free, include the following:
• satellite delivered digital audio radio service, which has resulted in subscriber-based satellite radio services with numerous niche formats;
• audio programming by cable systems, direct broadcast satellite systems, personal communications systems, Internet content providers and other digital audio broadcast formats;
• personal digital audio devices (e.g., audio via WiFi, mobile phones, iPods® and mp3® players);
• digital radio, which provides multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; and
• low-power FM radio, which could result in additional FM radio broadcast outlets.
We cannot predict the effect, if any, that competition arising from new technologies or regulatory change may have on the radio broadcasting industry or on our financial condition and results of operations.
http://www.sec.gov/Archives/edgar/data/1067837/000110465906011928/a06-1866_110k.htm#Item1a_RiskFactors_131950
Excellent job MUSCLE13, I was pretty confident that other broadcasters used similar examples for the definition of their competition. At the time I'm sure it seemed like a good idea....
Ryan, when you see a lost post with several links on it... it belonged to me. I don't know what happened. I posted a second post with links to the Entercom, Cox Radio and Radio One 10K's that all had similarily worded language to what you were establishing -- to help you out, but I somehow got logged out.
Radio One 10k
We must respond to the rapid changes in technology, services and standards, which characterize our industry in order to remain competitive.
The radio broadcasting industry is subject to evolving industry standards and the emergence of new media technologies, which may impact our business. We cannot assure you that we will have the resources to acquire new technologies or to introduce new services that could compete with these new technologies. Several new media technologies are being, or have been, developed, including the following:
• satellite delivered digital audio radio service, which has resulted in the introduction of several new satellite radio services with sound quality equivalent to that of compact discs;
• audio programming by cable television systems, direct broadcast satellite systems, Internet content providers and other digital audio broadcast formats; and
• digital audio and video content available for listening and/or viewing on the Internet and/or available for downloading to portable devices.
We cannot assure you that we will be able to adapt effectively to these new media technologies.
http://www.secinfo.com/dsvRq.v18s.htm#_103
Ryan,
I am not quite sure of the point you are trying to make. It should be obvious to the most casual of observers that free radio is satellite radio's primary competitor. If free radio were to disappear, satellite radio would flourish beyond our widest imagination. That satellite radio competes with free radio somewhere below direct mail is not that relevant in my mind. The competition is not reciprocal. Satellite radio could disappear tomorrow and it would have negligible impact on free radio. Because the competition is not reciprocal, one can't draw the conclusion that competition of competition is competition and therefore should not be considered part of the same relevant market.
If CD's, iPODs, MP3 players, internet radio, etc. were to disappear tomorrow, it would have little impact on free radio. They would also have only marginal effect on satellite radio.
OTOH, if Sirius were to go belly up, XM would obviously benefit (or visa versa). Obviously, XM and Sirius are primary competitors and free radio is a primary competitor to both. The converse is not true; satellite radio is not a primary competitor to free radio.
It seems obvious that satellite radio competes with each other and free radio. That hasn't changed since the inception of satellite radio.
I don't think this is the smoking gun you are seeking.
>>>>If CD's, iPODs, MP3 players, internet radio, etc. were to disappear tomorrow, it would have little impact on free radio.
So you are saying that if the iPod went away, terrestrial radio listenership would not stop declining? Who have the members of the NAB been claiming for the steady drop in listener hours per week the last few years? Satellite radio? I think not.
If GM is at least tepidly positive on the merger, Congress won't do anything to stop it (except maybe let Ed Markey hold some hearings to get himself some time on C-SPAN... that alone makes me glad that Sirius dumped C-SPAN :D ). The reason is that any bill concerning broadcasting goes through the Commerce & Energy Committee, chaired by Mr. Dingell from Michigan. Dingell's largest campaign contributor has consistently been General Motors, and IINM his wife is a lobbyist for a major public company headquartered at RenCen.
If Rick Waggoner wants the merger (and I don't think XM would agree to the merger without consulting with GM), any bill affecting this will not get out of committee.
This post has me 100% convinced the merger will succeed with minimal concessions. If the merger was announced, Parsons and Karmazin had already run it by enough FCC Commissioners to know what concessions to make to get their approval. Since I find it highly unlikely that GM isn't pulling for the merger, given that it was announced, we can be fairly sure that Congress is under control. The wildcard is the Justice Department, but this is a very strong angle that will probably lead to DoJ approval.
What concessions do I think will be made?
Kevin Martin has been big on one thing: family-friendly tiers (at a lower price than the basic tiers) on cable and satellite TV. The merged companies could apply this to satellite radio by offering a family tier of channels (say about 40-50 or so) that would voluntarily be placed under FCC decency standards and be subject to the same. This tier would cost $7.95 and be the non-xL music channels on XM and/or the Business Safe channels on Sirius, plus FCC-compliant talk channels.
IINM, the WCS licensees have only a few months left to build out their networks to the point where they meet signal quality standards specified in their licenses. If they don't meet those standards, they lose their licenses. That would free up spectrum; we could see a scenario where, say, XM agrees to license their technology (and, perhaps, if there's extra transponders on XM-3 and XM-4, lease transponders... Parsons basically said that XM-3 and XM-4 have the ability to transmit outside of XM's spectrum license) to another licensee. Hell, that may have been part of the impetus for the sale-leaseback...
Barring that, I've seen it suggested that XM/Sirius may promise that any interoperable receivers (which they now have a roadmap for commercial release as a merged entity) include an HD Radio receiver in every interoperable radio. That would instantly negate any reasonable competition argument, as XM/Sirius is willing to commit to giving HD Radio a push. Will this lead to a substantial number of people choosing HD Radio? I doubt it (people would actually have to be able to get usable HD signals, for one thing...), but it would look good. Ibiquity would love that arrangement, but if that's the cost of doing this merger, I think it's worth paying. How could the NAB complain about that? It out and out makes satellite a competitor with HD, on a level playing field. Hell, with receiver subsidies, buying a PNP unit would be the cheapest way to get HD Radio!
- My 2 cents for the peeps that think the merger is bad for the consumer: YOU CAN CANCEL! With that in mind, do you think the new SIRIUS will provide content, services and pricing that will make you want to do that? -
I don't just "think" it's bad for the consumer, I know it will end up bad - if not at first then eventually. I'm quite happy with the content I'm getting now and one service keeping the other in-check a bit. As an example: I've heard a few XM'ers say they wouldn't mind Nascar back. (I might care if Nascar didn't suck now and was entering it's 3rd year of declining ratings.) What would have happened if back when the XM deal was up, Sirius wasn't there to pay 7x the amount for it? What if they'd already "merged" and the new company didn't renew? Now you DON'T have the option of getting the other service, or even the inter-operable units that were coming eventually merger or not.
This is why you could actually have LESS choice in the long run. Not to mention Mel Karmazin keeps talking about advertising and increasing ad revenue, Gee I wonder where that's gonna come from? It won't be long before sat radio will be closer to FM than ever before, especially if the Sirius side has too much control of the the music. I haven't seen Lee Abrams name mentioned once in any of this, and his blog is quiet. Again, you figure it out. The people for this merger are really drinking the kool-aid on this one.
I, and many other people wlll be contacting the correct authorities when the time is right. And the MINUTE this thing gets approved, I'll be cancelling my 4 units. I can easily go back to my MP3 player, downloaded content and stream stations off the internet to follow the talk programming I'm familiar with. I can do it on the go right now with my PDA and cell phone.
That's another thing - I keep seeing people say they'll "get an iPod". Do some research people, and spend less money on a superior product with less consumer restrictions. Please, it's for your own good.
SteveWeBB... I think the ad revenue Mel refers to is based on expanding the demographics, not more ads on non-ad channels, per se.
Advertisers pay rates based on the number of listeners/viewers I believe. As the base grows ( or merges ) this drives up the price that is paid in a 30 second spot.More channels and higher rated programming also lead to these revenue increases.
Rubicon: All this is highlighting is that Terrestrial Radio, in their lobbying efforts, cannot simply say that Satellite Radio's definition of the "audio entertainment" market is incorrect. They have in fact already defined it. So opposing what XM/Sirius are advocating as a relevant market would be ridiculous.
This doesn't mean that there isn't other hurdles to overcome, but it does limit what terrestrial radio can use in an argument.
Terrestrial alternate route will most likely be to amend HR 983, and try to put pressure from Congress, in an effort to state that a combined XM/Sirius is a threat to localized emergency radio broadcasts.
Terrestrial alternate route will most likely be to amend HR 983, and try to put pressure from Congress, in an effort to state that a combined XM/Sirius is a threat to localized emergency radio broadcasts.
Posted by: Ryan Saghir
--------------------
And how will FM broadcast emergency information , if towers get knocked down? It's absurd they would consider this .
Even though Mel and Gary probably already know this stuff, someone please make sure they send all this to SIRIUS Corporate Offices for Mel to see it just in case.
This will be the clearing device we need to pass all regulatory hurdles.
I would like to know who these people are that have tier pricing on their cable options. People in comca$t country sure don't.
And here is something else to ponder. If Mel wants more ad revenue couldn't it be said that he will not ad more commercials to channels but to charge more per ad. It is really possible that this could be one of his options. If lister ship increases they sure can show the media buyers that rates have to go up.
>>>>And the MINUTE this thing gets approved, I'll be cancelling my 4 units. I can easily go back to my MP3 player, downloaded content and stream stations off the internet to follow the talk programming I'm familiar with. I can do it on the go right now with my PDA and cell phone.
Thank you for making my point. While you are cutting off your nose despite your face, I will be enjoying all that satellite radio has to offer and all the combined exclusive programming from SIRIUS and XM.
"I can easily go back to my MP3 player, downloaded content and stream stations off the internet to follow the talk programming I'm familiar with. I can do it on the go right now with my PDA and cell phone."
That's exactly what XM and Sirius are arguing.
A message to those who keep bitching about canceling...
-your fucking cheap
Thank you.
ps - the merger would make content and technology BETTER! and FASTER in development. Not worse...
- While you are cutting off your nose despite your face, I will be enjoying all that satellite radio has to offer and all the combined exclusive programming from SIRIUS and XM. -
Yea you hope. Or, you end up paying more and more while commercial advertising increasingly gets added. Either way, they'll have you by the balls.
- "I can easily go back to my MP3 player, downloaded content and stream stations off the internet to follow the talk programming I'm familiar with. I can do it on the go right now with my PDA and cell phone."
That's exactly what XM and Sirius are arguing. -
Yes but Ryan that's not what I WANT to have to do. And your average Joe consumer won't be able to do what my geek ass does. I'm running a hacked-firmware phone in order to stream what I want on the device I want use. And I'm not paying $80 a month for a data plan either. Technically I'm contractually limited to streaming only THEIR approved corporate content and on their devices and formats. I'm taking advantage of known loopholes in the infrastructure that 98% of other sat subscribers either won't be able to do or won't know about. It isn't a replacement for satellite - but I can pull it off and affordably. Most people cannot.
- ps - the merger would make content and technology BETTER! and FASTER in development. Not worse... -
OF COURSE IT WILL! Some day, all the car companies will merge into one. Then we as consumers benefit by the knowledge of a dozen companies coming together!!!! And you can shop at one convenient place instead of driving around! Plus you have the added bonus of being able to buy anything from a Hyundai to a Cadillac from the same company. And instead of the companies outspending one another to innovate (and wasting money), working together insures more rapid advancement in technology - rather than outdated concepts such as marketplace competition.
Less choices = more choices! Freedom is slavery! War is peace!
Whatever. If it happens, I'm gone. Period. End of story. I'll still have access to their exclusive content through the many internet sources, I just won't pay for it.
Steve my whole point is that your gonna run away from something you have been enjoying just because its gonna get raised a few dollars. But the raise is worth it cause your getting more. We are talking about a few dollars where you will be paying barely 20 bucks.
think of some of the other things you prob pay for monthly that people dont bitch about:
cellphones 55-130+
gym 60-80+
cable 30-60+
internet
porn sites 30-40+
You that broke?
What is funny about this potential merger and the competition they are facing is that Apple didn't want anything to do with these 2 companies. Now with them coming together they can put up a great fight.
- Steve my whole point is that your gonna run away from something you have been enjoying just because its gonna get raised a few dollars. But the raise is worth it cause your getting more. We are talking about a few dollars where you will be paying barely 20 bucks. -
There's far more going on here than just a possible price increase. First off - while I do have minor complaints, overall I'm happy with the service I have now and I don't need any changes. And the things I like about the service I have now are clearly in jeopardy with this potential merger. So I won't be "running away" from the service, simply voicing my opinion by cancelling it.
I was against unhealthy Daimler-Benz taking over profitable Chrysler (that was sold to us as a "merger" too), so I stopped buying their cars 10 years ago. Now, because of greed and a lack of integrity (which caused the green light for the "merger"), Daimler will be auctioning off Chrysler next week, possibly in parts - essentially killing the car company. Wake up people!
THESE THINGS END BADLY FOR US - the consumer.
Implying that I won't be able to afford an increase shows that YOU'RE SIMPLY NOT GETTING IT. If we continue to let all the companies we buy products from to merge - it's going to cost more and more to buy and do anything. Are we somehow saying that we are no longer a competitive, capalist society? Are we simply going to have government hands in everything, and trust them to do best for us instead of products and consumers deciding who wins and loses?
The FCC is going to need concessions to approve this, and we all know they are dying to regulate satellite radio. Will you all be waving happy flags when the uncensored service you love is threatened? The same people putting profits miles ahead of integrity WILL ALSO SELL YOU OUT on regulation too. The 2 companies can survice and fight it out, instead they want the easy way out.
Great for them - bad for us, in every single way.