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Concerns Of Sirius And Xm Listeners

By: Bob Maines

By now everybody knows about the Sirius and XM merger, first announced on February 19, 2007. The merger press conference stated that the unified service would offer more channel capacity and more premium services. As for the business operations? Both companies will continue to operate as separate services for the next 15 years. As it stands now, both networks actually use different compression and conditional access systems, making the receivers incompatible with each other. While a unified receiver is available, this would be an additional purchase to regular XM and Sirius brands.

Now that these networks are not directly competing against each other, their primary competition is with free services. Some listeners may wonder, will this merger slow down the adoption of satellite radio? Executives have stated that they are aware of the possibility and are not planning to increase the subscriber price. Instead, they wish to profit by introducing new services like video, navigation and advertising.

Has there been any opposition to the merger? There was some concern coming from the National Association of Broadcasters and the Consumer Coalition for Competition in Satellite Radio, who speculated that the merger might create a monopoly. These concerns were directed in various ways but most with an eye as to consumer cost. If Sirius and XM combine (which they likely will, as a press conference would officially verify in a few months) then since they would now be the only providers of satellite radio, this merged company could raise the subscription price, leaving loyal radio fans little choice but to pay extra. However, Sirius assured radio fans that there is still competition, namely from terrestrial radio, Internet radio and portable media players. Sirius has even gone so far as to promise to fix prices to abate the concerns of consumers.

One more concern is in programming. Both networks have major star power behind them: some of the top names penning deals with both providers include Oprah Winfrey, Martha Stewart, Howard Stern and Bob Dylan. Additionally, there is exclusive sports programming on both networks. The companies are hoping to lower costs of production by merging. Some have wondered if this means that the reduced production cost would result in less overall programming. However, this theory is contrary to the fact that it's likely both companies will keep non-duplicate channels, so even more programming will be needed so each company can have a full schedule. Besides, both networks have shown a strong interest in developing new product-new technology in fact.

This seems to be the point of the merger: with a reinforced status,Sirius and XM can elevate satellite radio to compete with other major media outlets in entertainment, like broadcast networks, cable networks, satellite providers and Internet programmers. Believe that the recent announcement of American television going exclusively digital in 2009 will make an impact in the gradual nationwide adoption of digital content. As of today, Sirius and XM have a total of 16 million dedicated subscribers. This is relatively small step compared to hundreds of millions of traditional radio, TV and Internet viewers. However, it is still one giant leap for the satellite radio industry.

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