When it signed Howard Stern last year, Sirius radio picked up a lot of subscribers, but the satellite radio provider still couldn't catch rival XM which sits atop of the subscriber satellite radio heap. Sirius' new six million subscribers represented a huge jump, but XM is closing out 2006 with 7.9 million. The New York Times is now reporting that Sirius might follow the old adage: "If you can't beat 'em, join 'em."
Sirius has apparently supported the idea of a merger for a while, but XM has refused to comment thus far. Because there is a lot of overlap in their offerings and because they have similar organizations, merging would lower costs and help boost the stock price, presumably. And that's where these decisions tend to be made, in the accountants' ledgers.
More info after the jump.
[Source: New York Times via Kicking Tires]
If the two join, the roster of celebrities available to customers would include Stern, Martha Stewart, Deepak Chopra, and Richard Simmons from the Sirius camp, while XM would add Bob Dylan, Ellen Degeneres, and Oprah Winfrey, among others. Subscribers would also get to hear every Major League Baseball, NBA, NFL, and NHL game, NASCAR races, as well as PGA golf tournaments.
The growth of satellite has been pretty strong but hasn't exactly matched the hype. Not a lot of subscribers actually go out and purchase a satellite receiver, instead they are usually people who got a system when they bought a new car and have extended their trial memberships. Not having to choose one over the other might make aftermarket sales of satellite radio-ready consumer devices go up. At least that's the hope.
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Reader Comments (Page 1 of 2)
Will @ Jan 2nd 2007 6:25PM
I have heard this story for about two years now, maybe three. I will believe it when it is finalized, until then it is not news (this means you Autoblog)!
Car videos @ Jan 2nd 2007 6:50PM
Guess Howard Stern will make even more money.
Tmoney @ Jan 2nd 2007 6:52PM
It can now become a reality now that they have the "High-Def" radio market to compete against. Any spec about it before would have been stopped by anti-trust laws.
A merger would lower costs...but only if they were to shut down some of the operations on one side. Also, I wonder how they would integrate the services of both - you would probably have to upgrade the consumer recievers - which would really stink for us.
Thanks for covering this NEWS as is develops and changes.
shiznannigan @ Jan 2nd 2007 7:00PM
No, no, and NO. For satellite radio to remain competitive, these two companies need to remain seperate. XM made most of their music stations commercial free because Sirius had done so first, and Sirius got Howard Stern (who, personally, I can't stand) because they wanted to beat XM at having a shock-jock act. Once you eliminate the competition, they'll become just like cable TV, or *gasp* FM radio - lazy, boring, lacking in content, and not caring what their customers say, because they know you have nowhere else to go for this service.
Jim G @ Jan 2nd 2007 7:08PM
This is not news. It's Sirius propoganda.
Dan @ Jan 2nd 2007 7:15PM
Here's a good article talking about why this won't happen:
http://www.siriusbackstage.com/2007/01/01/sirius-and-xm-to-merge-we-call-shenanigans-2/
Howard Kerr @ Jan 2nd 2007 8:09PM
In today's world of "Gotta keep growing, or else" I'm not surprized to read this. AND, as a further buttress, I agree with shiznannigan's conclusions that this merger will result in the loss of ALL those special features folks went to satellite radio for: that is, diverse, commercial-free programming, tailored to a diverse audience.
As I've said before, I was there when FM was a REAL alternative to AM. There were few, if any, commercials, and the programming was incredibly diverse. Thanks to media conglomerates and the lack of FCC oversight, FM has become as bland as AM. ALL the programs are the same, they ALL play the same 8 to 10 songs (the commercials seem to be the only things that change), and it's only a matter of time before the formats at each station fall into just 1 of 3 categories: TALK, semi-ROCK, and semi-Country. Hell, for that matter, ROCK and Country are sounding more and more alike these days.
Tom @ Jan 2nd 2007 8:21PM
With the rate that Sirius is adding subscribers why would they ever consider jumping on the sinking ship that is XM?
Stern is the most entertaining thing on any radio and just about single handidly caused the big jump in Sirius subscribers - he must be doing something right!
Tom [Sirius subscriber for the past 3.5 years]
Rob @ Jan 2nd 2007 8:23PM
Just as long as I do not lose Fungus53 (my punk station), I don't care.
p-oz @ Jan 2nd 2007 8:24PM
As much as content might suffer with a merger, it would take a merger for me to finally get a satellite radio. I want MLB & NFL. I'm not going to choose one over the other - if I'm paying, give me both.
Greg A. @ Jan 2nd 2007 8:34PM
#3 "It can now become a reality now that they have the 'High-Def' radio market to compete against. Any spec about it before would have been stopped by anti-trust laws."
Say what? Even if you can't figure out why your reasoning is flawed, consider this: DISH Network made the highest offer for DirecTV when DirecTV was put up for sale a few years ago. The Feds didn't give that merger the green light.
"I wonder how they would integrate the services of both - you would probably have to upgrade the consumer recievers - which would really stink for us."
Nope. They would just simulcast whatever programming they would have in common over the two different systems. It would be interesting to see if the company that would arise from a merger would stop selling either XM or Sirius radios, and if they wouldn't, how they would differentiate the two types of receivers for consumers. Perhaps it would continue to offer Sirius to people who want to listen to Howard Stern and XM to people who want to be absolutely certain their kids can't listen to him.
thiago @ Jan 2nd 2007 9:18PM
It's amazing how Stern is such a hack, but still gets credit because people swear that his show is the same as it was 20 years ago. Satellite radio will never become mainstream, Stern will just disappear into obscurity as he has been doing in the past year since moving to Sirius. Go ahead and keep believing his Howie math of adding 5 million subscribers single-handedly. His show now caters to those same rubes that tune into American Idol.
Uncle Jed @ Jan 2nd 2007 9:42PM
Before either actually launched their services (or, for that matter, their satellites), there was a theoretical "dual-chipset" talked about that would allow a consumer to, with the same radio, decide which service to subscribe to (or, even, to subscribe to both). When it became a Beta vs. VHS pissing match, they guaranteed that, at the very least, one would lose big and, quite possibly, both would suffer immensely in trying to play chicken with the other.
I know too many consumers who want one service but end up buying a car that offers only the other. Though it might seem minor, these consumers are not happy that they can't have their service in their new car or that they had take an unwanted included piece of hardware(albeit, often thrown in for free, in reality) while having to listen to their preferred service on an aftermarket solution.
It's time to grow up; Leave the two separate competitors just as they are but REALLY give the consumers the ability to choose the service regardless of hardware (in car or home).
While I'm on the rant, I also want to say that the multiple license solution originally proposed by XM, in which the monthly fee of (then) $9.95 paid for a household of radios, made sense and might have worked if this hadn't turned into a cellphone-like "free hardware in exchange for the subscription" model. I think I understand the rationale, especially in this subscriber-counting frenzy, but it sure makes it seem like a cheap way of getting you both ways, especially if you can't choose the service regardless of hardware.
So, there,... my 2 cents worth
AutoFan @ Jan 2nd 2007 10:07PM
I think that it needs to be pointed out that no matter how rich Howard Stern gets, he'll still one of the ugliest people on the planet. I'm talking Keith Richards ugly.
rj @ Jan 2nd 2007 10:12PM
To hell with sirrus
O&A O&A O&A O&A O&A O&A O&A O&A!!!!!!!!!!!!!!!!!!!!!
scarhappy @ Jan 2nd 2007 10:22PM
XM lost Nascar to Sirius and does not have the growth rate of Sirius.
Also Sirius has commercial free music, XM can not say the same thing as many of their music channel have commercials thanks to ClearChannel partial ownership.
XM is losing executive left, right and center.
Oprah's XM deals is not getting women to sign up, that's for sure.
Stern was Radio, FM Radio is dead and O&A and Adam/Danny are not pulling 10% of Stern listenership, he had 2 years ago.
Long live Sirius
Andy @ Jan 2nd 2007 11:20PM
I'm with Will on this one. Economists and so-called "business analysts" have been saying satellite radio would not catch on back when XM hit the two million mark. I could see an XM/Sirius merger, but wouldn't that constitute a monopoly since there is no way a rival company could compete unless it had state support? Satellite radio is not expensive, and I am aiming to purchase a satellite radio installation kit in the near future. Terrestrial radio is a burden with 30% of the air time being for commercials.
Greg @ Jan 2nd 2007 11:35PM
It will not be long before XM and or Sirius will be offering 'Streaming Video'.
When Streaming Video breaks out... sales will bust through the roof for either company, or other entities that emerge in this far from saturated product market.
shiznannigan @ Jan 2nd 2007 11:59PM
Scarhappy:
XM has a few commericalized music channels, but Sirius has fewer music channels. XM still has more commercial-free music channels than Sirius. As far as I know, their ClearChannel deal only affects terrestrial repeater locations (the ground antennas that Sat.Radio companies use to ensure service in metro areas, where tall buildings block satellite signals).
Shotter @ Jan 3rd 2007 2:18AM
Stern been hanging with Michael Jackson lately, or what?
*shudder*