Fresh Air is an essential manual on marketing radio stations and the radio industry, by Mark Ramsey. Read the After the XM/Sirius DOJ Approval
Now that the DOJ has approved the Sirius/XM merger, it's likely the FCC will follow suit with a minimum number of conditions or "strings."
Consider this deal done.
It reinforces my faith in the power structure that DOJ can look at the details of a deal like this and actually understand them, without being swayed by rank self-interest and propaganda.
Here's the official DOJ statement, courtesy of Orbitcast:
After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers....
As an aside, here's Orbitcast's helpful depiction of your tax dollars at work:
As I have often said, the consequences of this deal for the radio industry are marginal at worst.
After all, Sirius and XM - together or separate - are impacted by the same factors impacting the rest of radio. And they are even less capable and ready than the rest of us are to meet those challenges.
Here are just a few reasons why:
The lack of interactivity and customization - to say nothing of the lack of localism - will do a merged XM/Sirius no favors. These are inherent to the existing technology. Of course, look for the technology to evolve in their favor - and the more it evolves the less it will concern audio and the more it will involve video.
The stubborn resistance of Sirius management (which clearly will be in the driver's seat) to spread some form of their content (and I mean their premium content) across all available channels for free to the consumers who like their current radio options just fine says little for the post-deal vision of satellite radio leadership. If you're in the business of creating great content, you maximize your revenue by licensing it. Just ask Sony Pictures.
Finally, the chance that satellite radio "consolidation" will compromise the current media experience of those who already subscribe to either Sirius or XM is a very real possibility, all rate issues aside. The problem with subscriber-driven services is that you are tempted to become beholden to even the tiny factions within your subscriber base. Just ask the average Public Radio station. But in a subscriber-based world, every tiny faction counts.
All in all, satellite radio will be its own best friend or its own worst enemy. Their fate will have little bearing on the fate of the much larger radio industry in the long run.
And the latter, my friends, is in your hands and mine.
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Mark,
I've said this before...I have no problems with this merger as long as the FCC will further deregulate terrestrial radio too.
It seems that if the DOJ and FCC can go this far with Satellite Radio, then completely removing the newspapaer/broadcast cross ownership law should go as well.
What are your thoughts on this?
Posted by: Big Tuna | March 25, 2008 at 05:01 AM
For a long time I've never considered satellite radio a monopoly when considering all the other competing audio sources now available for the consumer in their vehicles, at their homes, and at their workplaces. I have difficuly believing that others can't honestly see that. Apparently, the Department of Justice agrees with this view as well.
I also couldn't agree more with your contention that because of all this new competition, what happens now rests squarely in the hands of the newly merged entity. Like you, I would propose video capabilitites. I would also propose additional highly appealing content, particularly creative ways of reaching 12-21 year-olds, in addition to imaginative uses of the unique characteristic of satellite radio being the only service that can reach 100% of the nation in a single stand-alone, mobile device. As you have pointed out, the lack of interactivity and customization capabilities of satellite radio are a hindrance to it compared to some of the other competition; maybe these other new areas are ways it can further develop. There are other ways of making satellite radio quasi-interactive, such as using the phone for voting, similar to what is done on XM's 60s on 6, or perhaps utilizing the internet more for "talking back" or in some way customizing the user experience. Special gamer talk channels (experts on Warcraft, for example) could share their tips for being more successful in playing these games in order to reach 12-22 year olds. With the number of channels available, there appears to be plenty of room for this kind of experimentation.
Posted by: Al | March 25, 2008 at 10:58 AM
Someone pointed out elsewhere that the Sirius Stiletto is a good attempt at customization.
Posted by: Al | March 25, 2008 at 12:01 PM
I wish. I have one, Al. And it's a lot of work. With a very clunky user interface.
Customization knows what I want without a lot of work on my part.
Customization modifies the channels to my taste.
Posted by: Mark Ramsey | March 25, 2008 at 12:15 PM
What device customizes according to your parameters (to your taste)? Would that be different than "customizing" by simply listening to a very narrowly programmed music channel, such as Latin Jazz, which might appeal to someone's taste, assuming that a wide variety of such channels were available (such as satellite radio or the internet)?
Posted by: Al | March 25, 2008 at 05:11 PM
The one advantage satellite has over terrestrial is positive press. They are about to get something Clear Channel would never get, which is more than 100 channels in every market in the country. Yet no one seems worried, and I haven't read too many negative reports.
Posted by: George | March 25, 2008 at 07:21 PM