Merger, Siriusly!

Yesterday XM and Sirius, the only satellite radio providers in the market, announced their "merger of equals." Under the leadership of Sirius CEO Mel Karmazian, the $4.9 billion merger should close by the end of the year if approved by the Department of Justice and the U.S. Federal Communications Commission.

Satellite radio was supposed provide us with a better alternative to terrestrial radio, which has suffered from decreased listener ship since the 1996 Telecommunications Act allowed for the consolidation of radio stations. The result is less diversity and less quality content. Satellite radio promised quality content, no commercials and the ability to TiVo our favorite radio programs. But just as Internet radio, file-sharing and even the archaic practice of cassette recording music off terrestrial radio supposedly ruined the music business, these satellite recording devices are the catalyst for yet another infringement suit filed by the record companies and, our favorite, the RIAA.

It is very difficult to believe that two merging satellite radio providers will be able to "defeat" terrestrial radio with more ease than if they stayed separate. XM and Sirius together do not make a stronger unit, they just make more of the same thing. Yes, they are bringing Oprah and Howard Stern together under one roof but really, who listens to both of them? I have never subscribed to satellite radio but according to blogger Frank Ahrens, he is not very willing to pay for programs to which he does not intend to listen.

I am always very wary of mergers and potential monopolies. I believe, as most people in the music industry do, that media consolidation has led to the downfall of radio, television and the record companies. Competition is the key to progress; this includes competition in content, format, advertising and monetary value. Competition equals innovation. Consolidation equals the same old thing, just with a shiny new exterior.

If Sirius and XM remain the only satellite radio companies, or the singular satellite company, I doubt they will become what we all hope they will be; the radio we are all waiting for to save us from our iPod playlists. Sirius and XM have been in the market too long. A new satellite radio company will have to come along to change the market and meet the demands of this generation. But who will it be if everyone else is working for the single super-sized Sirius, seriously?

Thomasch, Paul and Kenneth Li. "Sirius, XM see deal closing in 2007." ABCNews.com. 20 Feb 2007.