XM and Sirrius are merging?
This morning while talking with a friend I was asked, “What’s this about XM and Sirrius merging?” That was a funny question. Only a few hours earlier I’d gotten an e-mail from XM announcing the merger to current subscribers.
It seems that the belief out there right now is the combination of the two companies will help them toward becoming profitable. Hmmm. It also means that consumers won’t have a choice in competitive pricing. CNET’s most recent take can be read following this link.
We’ll still have to watch this merger. I’m sure regulators will step in on this one. The big issue will be focused on monopoly for sure. However, with only two satellite radio operators in a market, oligopoloy power already existed.
Orbitcast has some thoughts on the monopoly and pricing issues. Interesting read. Techdirt also has an interesting thread on it as well.
Here’s my bottom line on this merger. It’s not shocking. Neither company has been in the black. Further, they’ve been paying insane contracts to get some on air talent. Maybe some of that will stop. Finally, I’m sorry to say, but certain industries tend toward monopoly. Just take a look at most network services. Broadband, Wireless, & Telephony. Sure, “Ma Bell” was broken up. But the Baby Bells have been reassembling themselves like the liquid metal fellow from Terminator 2. The reality in networked businesses is that they will always be monopolistic or oligopolisitc. Is AT&T now Cingular, or is Cingular AT&T? You got me on that one.
Is the merger a good thing? Not sure. If it is allowed to go forward I’ll probably be seeing a higher bill for my satellite radio services. Regulators have a ton of catching up to do when it comes to digital technologies. Many pricing models applied in the communications industry still harken back to the analog days. Digital tech throws a curve ball at ideas like “long distance pricing” and standard congestion models. And when it comes to media, the big concern is that one provider controls all the information reaching the masses. Never gives anyone a warm fuzzy. 
So, the Sirius / XM merger is one more digital service out there that desires to be consolidated. We’ll have to wait and see if it’s allowed, and how it will impact users down the road. Wonder how much the hearings on this will cost us….. 
