XM, Sirius merger has good, bad sides

XM, Sirius merger has good, bad sides
Business analysts not optimistic about deal's chances of approvalBy

George Lang

Assistant Entertainment Editor

After months of courting and industry speculation, satellite radio providers XM and Sirius announced their civil union this week. If the planned merger clears its anti-trust and communications hurdles, subscribers will see the services merge by the end of 2007.

"This combination of our two offerings will benefit you — our loyal listeners,” Mel Karmazin, chief executive officer of Sirius, said in a prepared statement. Karmazin, who will also serve as CEO of the new company, went on to make what are called "forward-looking statements” in the securities business.

"As a single company, we'll provide superior programming to you every day with the best of both Sirius and XM,” Karmazin said. "Currently, XM and Sirius broadcast a wide range of commercial-free music channels, exclusive sports coverage, news, talk and entertainment programming. Howard Stern. Oprah and Friends. The NFL. MLB. NBA. ESPN. CNBC. Fox News. Additionally, the combined company will be able to improve existing services such as real-time traffic information and rear-seat video as well as introduce new ones.”

If the deal goes through — BusinessWeek is reporting that business analysts are less optimistic than Karmazin — we satellite heads must prepare for a season packed with joy, compromise and outright rending of garments over what will happen to our respective services. I have been a Sirius subscriber since mid-2003, one of the first 125,000 to sign on with the service. Back then, satellite antennas were rarely seen in traffic, and subscribing to Sirius — the second service to go operational — was considered risky, like buying a Sony Betamax in the early '80s. Both services were far from being profitable, so any choice was a calculated gamble, but I chose Sirius for its deep indie-rock programming on Left of Center (Channel 26), and its three public radio stations.

Four years later, Sirius has nearly 6 million subscribers, while XM totals about 8 million users. At this stage in the game, I am far less vigorous in my Sirius devotion — these days, it is a Coke vs. Pepsi choice. Now, subscribers' biggest worry is that the combined service will be Crystal Pepsi or New Coke.

The future company will weed out redundancies, and while those fascinating people who follow both Howard Stern and Oprah Winfrey will be ecstatic, the worry is that certain channels that were markedly better than their competition might be lost. Left of Center is far superior to XMU in its timely programming of independent music, but which one will survive the cuts?

Until the companies can make the government relatively happy about this merger, the two will continue to operate independently. But my greatest concern is that, without another company in its orbit, XM/Sirius' programming will get lazy.

If that happens, podcasts might be our last refuge from mediocrity in broadcasting.

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