"WASHINGTON — Federal regulators have formally approved the merger of the nation's only two satellite radio operators, ending a 16-month-long drama closely watched by Washington and Wall Street.

Sirius Satellite Radio Inc.'s $3.6 billion buyout of rival XM Satellite Radio Holdings Inc. will mean 18 million-plus subscribers will be able to receive programming from both services. Executives say it will mean huge cost savings that will lead to a first-ever profit for the relatively nascent industry.

The Federal Communications Commission voted 3-2 to approve the buyout with the tie-breaking vote coming when the companies agreed to pay $19.7 million to the U.S. Treasury to settle FCC rule violations."

http://www.foxnews.com/story/0,2933,391497,00.html

There's a similar merger/buyout situation going on right now between DMX and Muzak.........

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/04-07-200 8/0004788054&EDATE=

http://info.muzak.com/media/press/33/Muzak_and_DMX_Receive_Clearance_to_Merge/

http://www.dmx.com/files/library/press-releases/040708Muzak.pdf

This particular piece of news--and others along those same lines--has been kicking around DMX & Mzk. for about a year and a half now.

Personally, I hope Muzak plays "American Pie" on its "FM1" satellite channel just before they emerge as "DMX Muzak Inc." if ever that should happen.....

Watch that stock go nowhere....Nobody is buying it during this stupid ass Bush recession. Even $12 bucks a month is a stretch now. They will continue to bleed money with all their expenses.
Great idea but will never be mainstream until its free.

I suspect with the homogenization of satellite radio, we'll soon see a free service. This merger basically created a new band on the dial (although it's unique because one company owns the whole band). now that there is a standard, we might see some free commercial channels, which carry ads for the commercial-free subscription service. This would also be a good PR move, as the satellite company could claim to "serve the public" with it's free band (a claim that I would agree with if it's truly free). In fact this has been my prediction over the years in previous posts on this board.

Further down the line, we could even see an AT&T-style break-up of ownership if this new company gets lethargic. By that point, we'd have an established band that could be split up among other companies. This is why part of me likes this merger; I don't think we'd have a standardization of tuners without it.

Why would you think there'll ever be free satellite radio? I've been a Sirius subscriber for three years now and I don't ever see free service, just because Sirius and XM are merging. And what do you mean by there was a new "band" created by the merger? This isn't AM/FM, it's a satellite service and you listen to it through your FM radio. What "band?"

I agree with Radioboy. This just isn't something a lot of people are going to pay for right now. I dropped my Sirius subscription over a year ago simply because most of the programs I got from them had either been dropped or I can just download them for my iPod. Also, I bought an HD radio tuner. OPB comes in pretty good with that thing.

Chapter 11 BK within 3 years. Mark my words.

Uh....why? Why should anyone mark your words?

Because when it happens, you can then say, "Oh yeah, Vitalogy just nailed that one! Spot on, what a bad ass he is!"

That's why.

You should mark my words because both of these companies are saddled with major contracts and a crapload of debt, and it's my belief that subscriber growth will flaten out and may actually decrease over the next 3 years. Companies like this LIVE off of subscriber growth. This will put the squeeze on the combined company where they will be unable to meet their obligations and will seek protection in bankruptcy court. The company will re-organize, sans debt and sans existing shareholders, and will move forward as most other mismanaged companies do.

Hmmmmm, it seems more likely now that with only one flavor you will see them start with advertising on their channels. Not all at first but what choice do you have now? Advertising revenue's will help keep them from bankruptcy.

But, how many people will cancel because of commercials? The whole point of subscription radio was to be able to listen to commercial free radio, right?

If a free direct-broadcast satellite radio service comes out of this merger, will the FCC impose decency restrictions on the content? Is it technically feasible for the new company to generate additional revenue by selling bandwidth on its satellites for services not related to satellite radio?

I have never owned a satellite radio receiver. However, it was my understanding that the marketing behind the service pushed commercial free content as only one of the selling points. The other component of the marketing was that satellite radio allowed for reception of the same brand-name content anywhere in the country, without ever having to change stations. People that do a lot of traveling and that bought satellite radio to listen to syndicated programs probably care more about the latter than about commercial breaks.

yes, but people who do a lot of traveling are certainly a niche market, at best.

Given that the merger will (eventually, after they get everyone on compatible gear) give them loads of extra sat capacity, it seems likely that they would lease some of it out.

I think that a free (or very cheap) "basic cable" package, with premium upgrades available, would be a good model for them as a monopoly.

The internet is where it's gonna happen.

Besides, when you take a, relativity weak, single satellite signal, and split it up into 100 "channels" or so, the audio quality is just awful.

BTW on the cable thing... I heard the experts originally thought that subscription TV fees would end TV advertising... but most cable TV channels are loaded with ads.

Ha ha ha! So much for the infallibility of those "expert" predictions....

"Why would you think there'll ever be free satellite radio? I've been a Sirius subscriber for three years now and I don't ever see free service, just because Sirius and XM are merging. And what do you mean by there was a new "band" created by the merger? This isn't AM/FM, it's a satellite service and you listen to it through your FM radio. What "band?"'

The reason is that all new satellite radio receivers will now be able to get the same service. This will make it easier to incorporate it into factory cars. This proliferation will create a huge market. Why would the company chose to not market to a huge number of people who have the tuners but don't subscribe? They might as well run free programming with ads on a basic free tier if these receivers become common. Then they are earning ad revenue by serving people who are unwilling to pay for the commercial-free service. What I mean by "band" is that "satellite radio" will refer to just one service now. You'll be able to say "it's on sat channel 23", as universally as you can now say it's on "99.3 FM". In this sense, it creates kind of a "band", or if you prefer, a "universal channel lineup".

I gotta disagree with egor about the audio quality of satellite radio. It's absolutely phenomenal.

It's not necessary to listen "through your FM radio" as outsider suggests... your satellite receiver can be hardwired directly to your sound system (stationary or mobile) as easily as an ipod. In fact, running it through the FM band actually degrades the satellite signal, so a direct path is not only easier, but better.

Finally, as a member of the "mobile niche", there's nothing like traveling from Portland to Astoria to Eugene to Bend, and having the signal be strong and fade-free. It's in my car, truck, house and shop. 100+ channels of great audio for 40-cents a day... I'll take it and run.

PS: vitalogy, thanks for predicting the chapter-11 status of the service... it may drive the stock down for a minute and I'll buy those shares in a heartbeat, thanks!

Wait until they issue new shares though.

Maybe it was just the equipment I listened on, the music sounded way over compressed. But, I don't like the sound of mp3s either.