The United States Department of Justice yesterday put their stamp of approval on the proposed $5 billion merger of satellite radio companies Sirius and XM Radio. The DoJ said in a lengthy ruling statement that the takeover of XM by Sirius does not constitute antitrust violations and that there are no indications that prices for the combined service would rise or that programming would be affected.
Critics called the proposed merger a monopoly and that programming, especially those aimed at minorities, would be impacted with the combining of the two satellite services. However, the Department of Justice said that combining Sirius and XM would give them better leverage in their battle with current and upcoming entertainment technologies, such as iPods, Internet radio and video on demand on handheld units.
Like the demise of HD-DVD in favor of Blu-Ray technology, this gives consumer one option of buying just one satellite receiver in the future. Sirius receivers were not compatible with XM and vice-versa. This will, no doubt, grow the number of satellite radio subscribers which sits at nearly 17 million, combined, right now.
There was some talk during CES that there will be some "cross-pollination" of some program between XM and Sirius for those people who have one or the other receiver. It's not immediately known when the new "all-in-one" receiver will be available.
The final hurdle in the combining of the two services will be the blessing from the Federal Communications Commission. However, that appears to be a formality as the biggest challenge to the merger was the government's investigation into whether a Sirius-XM marriage would be construed as a violation of antitrust laws.
North of the border, the two Canadian subsidiaries of Sirius and XM will most likely be forced to merge after the FCC OK's the takeover. XM Radio Canada and Sirius Canada rely upon the bulk of their programming from the United States. A Canadian merger would not face the scrutiny of government regulators as one company would merely give up their license when the two combine.
The Canadian companies biggest problem, however, would be to figure the market value of each service and divide the stock in a fair manner. XM Canada says their programming and their ties to the car industry make it more lucrative to Sirius Canada. However, Sirius Canada says their stock is more valuable as they have more subscribers than XM Canada. So, it will be interesting to see what transpires up there.
Traveling as much as I do, I've held off on getting a satellite radio just for this moment. There's a lot of things on XM that I like, but there's a lot of programming on Sirius that interests me, as well. I'm going to wait until the new all-in-one receivers come out and then I'll probably sign up. Then I won't have to listen to country and western stations with farm market reports between Des Moines and Kansas City.
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