with Mel at the helm. I didn't see this coming this fast. Wonder what they'll open at tomorrow when the market opens?

http://money.cnn.com/2007/02/19/news/companies/xm_sirius/index.htm?postversion=2 007021914

Sounds like the whole thing could be Xirius!

The merger has been rumored for the last year or so.....I've just been waiting patiently. Maybe now they'll use the nifty XM portable player with Sirius programming. That would rock.

Who cares about them? I don't. I don't consider Satellite radio "Radio".
It'll be very long from now before they are proffitable. 1.6 Billion in debt is quite a bit.
I predict they'll go bankrupt in the future.

In order to properly understand an industry, you have to look at the entire industry. This is new technology...it took television from 1939 (ish) until the mid 50's to become widely accepted in American society...

Saying who cares reminds me of my grandparents who don't see the benefits from the 'net. Maybe I'm just a gadget geek who is an early adopter, I won't deny that...but I still think respecting new developments and checking them out are important to any enthusiast in any industry.

1.6 billion in debt is not too bad for a company valued at 13 billion dollars.

And I'd be interested to know how Jay-zie defines "radio."

Does it have to be local? That would mean AT40, Casey Kasem, Wolfman Jack were not radio.

Does it have to have music? That would eliminate talk stations.

Does it have to be live? Just the jocks or the music too?

Does it have to come off a transmitter instead of a bird? No internet radio then either?

Or is it really nothing more (or less) than widely disseminated audio entertainment and/or information, provided on a regularly scheduled basis?

I think to a good extent Sat radio is here to stay for now...will it still be here in 10 years? I think its got as good a shot as any as outliving and subduing HD radio (its chearper, more options, and less FCC oversight...aka no FCC oversight for content anyway), the question is, with most major metro areas building citywide wifi, how long will it be til internet ready car stereos and regular stereos allow us to listen to anything on live365 we want, any stream of out of market stations we want, or even in-market stations who have very small coverage areas (like a KUIK or something like it) that has streaming on the net. What would technology like THAT do to broadcast radio. I beleive much like cable TV 25+ years ago, broadcast radio and Sat radio can co-exist...i think the threat to broadcast radio(and Sat) is the potential that WiFi holds. I think its 10-15 years off, but its scary to me..exciting as a listener, but if i was a youngin' in radio, i might be thinking about what other careers i could pursue down the road...

Cause when Joe Schmoe can do legally (as opposed to pirating), the same things as local radio from home for next to nothing, with larger playlists and local content, and no ads...broadcast radio could be in trouble...

I don't think comparing sat radio and the Internet is valid.

The Internet added significant new value to us. We are now connected in a lot of ways we were not before --or were not without a lot of expense and latency. Those things are gone today.

Publishing is cheap, as is communication.

Think about it, we spend time here with one another and don't think twice about all that had to happen to enable that. Internet is a classic example of a disruptive technology.

Sat radio is not disruptive at all in that it has no clear advantage over existing radio means and methods. That puts it in the class of optional things and those often do not succeed in the longer term because they fail to add unique and significant value.

Why do you think they tried to get exclusive deals like the one with Stern? They are having to force the value add perception because the core tech does not bring one on it's own --a significant one that is.

Take a quick look at the differentiators:

-coast to coast
-lots of channels
-low noise
-subscription
-unregulated content
-requires special gear
(there are others, but these will do)

None of these things has the mass appeal required for a tech to be disruptive. In order for a new tech to make it, it's gotta have something that a majority of the target market for it wants, and that something needs to be either at a fraction of the existing cost, or must be unavailable in other competeting technologies.

If these elements are not present, the tech has a marginal chance of success in the longer term, barring some regulation or legal solution that ends up mandating the tech.

Of the differentiators listed above, the significant one is the subscription. It does enable some of the other differentiators, but also marginalizes the mass appeal of them as well. IMHO, that's where the gamble was --and they appear to be losing in that regard.

The bottom line is that none of those differeniators has enough mass appeal to be disruptive. The big question is the balance between cost of entry, cost of consumption and that appeal.

They've taken the losses on cost of entry with limited success. The only option left is to lower the cost of consumption, thus the merger attempts.

These, combined with a lower overall subscription, would propel the tech into new consumers hands at a greater rate then they are seeing now. Or, maybe just lowering the overhead for the existing body of consumers is enough to make it viable.

I'm not sure anybody knows.

And a whole lotta people don't care.

Outlast HD Radio?

This is likely, barring some serious content related innovation and investment from the majors.

Go through the same exercise with HD, it's not disruptive either and faces many of the same challenges. The biggie for HD is the very low cost of consumption.

If they can cut barrier to entry before the tech gets marginalized in too many potential consumers eyes, HD has a solid shot on FM, because it does offer the potential to offer some solid value adds to FM stations.

(if they take advantage of it --to date nobody really has.)

HD FM does have one advantage and that is the tech investment has largely been made. Those are now sunk costs. Operating from this point forward really does not have that much impact.

All comes down to content innovation and station identity innovation (formats that leverage both the main stream and the supplemental stream). If that happens, people will bother to obtain HD capable radios. If it doesn't, nobody will bother and it will wither and die eventually.

Just watch HD though. Before the majors let it wither from lack of innovation, they will attempt to put subscription content on there, or will leverage it for data purposes. If you see either of those happening, it's all but over for HD.

Merging is specifically prohibited in their licenses.
Although the Bush friendly big business friendly FCC could wave that, it is unlikely to be approved in the time remaining before the next presidential election. Giving the merged entity a monopoly would not be good press.

They both are not making money and their financial worth is grossly overstated. Unlike terrestrial licensees, they have no land and tower per se to count in the asset column.

Like terrestrial radio, their future holds much competition from internet based wirelessly delivered infotainment channels.

Look for the whole thing to be downsized or sold if they are (and probably will) prevented from merging.

Art Bell & Howard on the same bird! Yay!

(Full disclosure: sold both my XMSR and SIRI yesterday. My portfolio is broadcast-free!)

There is a good chance that the sat companies can get the merger provisions waived. Right now less than 10% of the country subscribes to them, making the combined company a very weak "monopoly" compared to the reach of radio companies, TV companies, cable companies, etc.

As publicly traded companies, their financial worth is exactly what shareholders believe it to be.... numbers of shares outstanding x (times) the stock price of the company.

Their hard assets include complex satellites circling the earth -- while most radio stations lease both their tower site land and their office space.

Their biggest advantage over broadcast radio, The huge choice of commercial-free "stations" for a small monthly fee (with commercials on the most premium of channels) was rendered virtually useless by the 2001 debut of the iPod. In the end, it is the iPod which will likely hasten the death of sat radio, and probably HD radio, and over the air radio as well. We are entering the iPod and internet age. Trying to save radio as we knew it is like trying to save the village blacksmith. It is the technology itself, and not the skill of those who ply it, that is rapidly becoming obsolete.

some people still need horseshoes....

how about shaking out 5000 radio stations. 8000+ ought to be enough.

Tdanner: I don't think the situation is that dire YET. Radio can still be saved, it's just going to take some creative thinkers. People who FULLY understand the obstacles radio faces in the age of the innernets.

As it is, most of the decision makers at stations are too pussy, or too set in their ways to completely revolutionize the industry. But that's what it will take -- someone to come in and flip everything on its head.

Hi, my name is Jai...

"Trying to save radio as we knew it is like trying to save the village blacksmith."

I completely agree. So why bother right? Let it die and we all move on right?

Exactly!

Take some of the great ideas posted here and elsewhere and implement them! Radio either evolves or it withers. We've got egos and some set expectations getting in the way of what otherwise should be an interesting time for radio in general.

The advent of HD allows for new content forms, station identities and choice in general. On FM, this is a resource currently being squandered with some lame commerical free, can't last, shuffle formats that are nothing more than a big "Me Too" statement that reinforces how cool other technologies are every day they are on the air.

I read and write about stuff I know I would enjoy hearing, but I don't see anything but lame attempts to make the most of what's been established. What gives?

There are a ton of options for HD enabled FM stations. When, if we see them implemented, we then will see if radio remains viable or not. Until then, the whole "tech is killing radio" stuff is bunk, IMHO.

Put this tech generation on the air and I assure you they will connect with each other, just as past ones have. That's what radio does and that has not changed one bit.

I feel like a moron because I bought some Sirius Radio stock at $5.05, and the price has not recovered since then!

The problem that I have with the "Radio is Dead" argument is that making this argument is effectively saying that there is nothing that has to be delivered to the audience live. What about programs with audience participation? What about sports?

I want to avoid making comparisons to other technologies in predicting the demise of radio because there are a lot of complicated factors that I don't understand. For instance, BBS systems disappeared very quickly in the mid 1990s, as Internet Service Providers opened up in many communities. Or, there used to be a number of competing Internet search engines until the debut of Google. If these patterns were true of all forms of media, then local over-the-air television stations would have been killed off by cable in the 1980s, and "local" terrestrial radio would have been killed off by satellite a few years ago...or it would have been killed off by television in the 1950s...or it would have been killed off by shortwave radio in the 1930s. Obviously, things didn't turn out this way, so we need a more sophisticated analysis.