February 21, 2007

XM and Sirius to form Super Mega Satellite Radio Giant

Because I subscribe to XM Satellite Radio, I received this email in my inbox yesterday:

Dear XM Radio Subscriber:

We want to share with you some exciting news: Yesterday, in Washington DC, we announced XM Radio will be merging with Sirius Satellite Radio to form the premier digital audio service.

The merger will create a satellite radio company that will provide consumers across the country with more and better premium radio programming. The combined company will be able to compete better in what has become a very complex and dynamic entertainment market.

Where today our exclusive contracts mean you had to choose between baseball and football or Oprah and Martha Stewart, the new company will seek to ensure that in the future, you will be able to access both companies' programming. And, once we are fully integrated, those of you who have factory-installed satellite radio will no longer be limited to the programming provided by the exclusive satellite radio service chosen by their car manufacturer.
Sounds pretty darn great, right? Great for XM and Sirius that is. What about the consumer? You know, that often forgotten, stepped on, or otherwise overlooked economic constituency. Well, as MSNBC reports, we could quite easily see the monopolization of the still nascent satellite radio industry, which in turn may spell higher prices and advertising bombardment in future XM/Sirius programming and services. That is precisely what federal regulators will be examining as this potential deal moves forward, and many experts say that the two companies will face significant obstacles in getting the merger approved.

For me personally, I utterly and unequivocally oppose this plan, 110%. While I understand that both companies are in the red and cannot sign up subscribers fast enough to cover their exceedingly high costs, not to mention the fact that new subscriber rates are decreasing, there still must be a better business model than complete stifling of the competition. The democratic, capitalistic, free-market economy functions best when competition is rampant because the need to outperform a rival fosters innovation, gives consumers choices, and keeps pricing and practices in check. Satellite radio is no exception. It's a great idea that has yet to be fully realized; indeed its marvels have only begun to be explored.

Creating a consolidated satellite radio giant in this emerging industry is not the answer and will only hurt content providers as well as listeners. We've already seen what has happened on terrestrial radio (here on Earth, so to speak) when consolidation and mergers reign supreme. You get two or three channels of the same old boring, tired, and deathly repeated 20-song playlist, with little to no room for new, independent/underground, and other 'outside the mainstream' acts. You instead get the most mainstream of the mainstream, and who does that really serve?

Please FCC, do what's right and DO NOT let XM and Sirius merge.

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