July 26th, 2008
Howard’s happy: Sirius-XM merger (finally) approved; Now the work really begins
The government regulatory debacle known as the Sirius-XM merger has officially ended as the Federal Communications Commission approved the deal after 17 months of deliberation (and lobbying from the National Association of Broadcasters).
According to the Washington Post and Wall Street Journal the FCC approved the deal in a 3-2 vote after Sirius and XM agreed to pay $19.7 million in fines (Techmeme).
The government took more time to approve this deal than the Exxon-Mobil merger and basically every other deal it has thought about. Sirius and XM will have 18 million subscribers combined.
Disclosure: I’m a Sirius subscriber and listen to Howard Stern every morning so I’m not going to pretend to be objective here. But politics held this deal up and frankly it’s a government embarrassment. I also never got how Sirius and XM were a monopoly given that they compete (and lose) to Apple’s iPod and other music choices. Sure, Sirius and XM have a satellite radio monopoly, but it’s still a shack in an upscale audio entertainment neighborhood (Apple has the best house on the block). Zoom out a bit and you see a monopoly that’s basically meaningless.
In a statement, the NAB said that the FCC vote “comes as a disappointment.”
Now the deal is done the real work begins. Here’s what I really want to know:
- Can the combined companies really cut content costs after signing big deals with the NFL, MLB and Stern of course to set a precedent? Is the NFL really going to take less? How about Howard?
- Can the new company compete with the iPod?
- Can Sirius-XM recover the enthusiasm that waned following 17 months of red tape?
- Could Sirius have walked away from the deal and bought XM in bankruptcy?
- Will devices get all content from XM and Sirius and deliver live reception (I’m usually on foot not in the car) that actually works?
- Is the real distribution model for satellite radio really on the Web (that’s where I mostly listen)?
- When will someone create a satellite radio, MP3, AM/FM player? Confessional: I still listen to traditional radio of the AM variety for live news (Bloomberg mostly). Yes, it’s uncool, but when something happens in NYC–blackout, terrorist attack, falling crane off a building etc.–you’re light years ahead of the iPod carrying masses when you have live news from a trusty am radio. I’d rather know what’s going on than be trendy. The downside: I carry around too many audio devices.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
