As most of you almost certainly recognize Sirius Satellite Radio and XM Satellite Radio formerly merged on July twenty ninth, 2008. If you are like most people, your first reaction was "WHAT?"
The knee-jerk reaction was that this created a monopoly, the very factor the FCC (Federal Communications Commission) is meant to guard against, and how the heck did this happen? Many of you probably bear in mind the Bell Phonephone monopoly and how in 1984 it had been forced to split. This resulted in AT&T and 7 smaller regional companies known as the "Baby Bells". It did not hurt the industry and of course, resulted in competition that has contributed to keeping phonephone prices down. It's a whole new ballgame these days though.
As far as Sirius and XM go, though it absolutely was referred to as a merger, it was technically a takeover or acquisition of XM by Sirius. In 1997 (was it really that long ago?...how time flies!) the FCC granted 2 licenses for satellite radio networks within the U.S. and stipulated at the time that one of the holders of the licenses wouldn't be allowed to achieve management of the other. This merger then was very controversial and it had been stunning, to say the smallest amount, that the FCC would allow this to happen.
Well, it didn't really happen overnight. The official announcement of the merger occurred on February nineteen, 2007. Just one month later they filed a "Consolidated Application for Authority to Transfer Management" at the FCC. On March twenty fourth, 2008, additional than a year later, the U.S. Department of Justice, Antitrust Division closed its investigation of the 2 corporations and cited that there would be no hurt to customers or to competition. On July 25th, 2008, the FCC approved the merger in a very three to 2 vote, though even this vote was questionable as it had been purely along party lines (though when there are only 5 people voting....). Sirius XM Satellite Radio came into being simply four days later, in the U.S. XM Canada and Sirius Canada are still operating as wholly separate companies.
There have been, in fact, two colleges of thought on the subject.
The advantages of the merger were expected to be:
1. Since each corporations will currently operate in concert entity, the value of licensing the fabric to be broadcast should be reduced. Clearly, less workers will be required to run the newly merged company and programming will be in a position to be unfold across the combined satellite constellations of both companies.
2. The variety of programming is expected to increase. For example, if all the duplicate channels are done away with, that leaves more programming house accessible for which new contracts can be written. The subscribers from both services would profit, though since the merger there have been claims by some that the programming has suffered.
3. Joined company, more cash can be spent in order to develop new products. For example, both XM and Sirius now carry satellite weather and traffic, undreamed of at the time that satellite radio was 1st launched. It's totally expected that new technologies can result in new product development and that the releasing up of funds by the merger will enable this to happen a lot of quickly.
4. United company, bankruptcy was averted by both. When making an attempt to induce approval for the merger, the businesses argued that bankruptcy by both would end in less competition for land-based mostly radio stations and for streaming services like Pandora.
The cons of the merger were expected to be:
1. That as a monopoly, thus to speak, the company could raise subscription rates. That happened in March 2009, as rate hikes were announced, however the Sirius CEO Mel Karmazin has offered to repair prices therefore as to satisfy regulators and therefore the consumers.
2. That new development would be hampered. Opponents argued that XM's competition with Sirius is what prodded each companies to develop new merchandise, like smaller receivers with many more features.
3. By way the biggest argument visited the consolidation of these two corporations resulting in an exceedingly monopoly. In essence yes, but it absolutely was argued that there was truly more competition outside of those 2 firms, as there have been competitors streaming audio content to moveable devices, like cell phones. ClearChannel Communications offers an application that enables access to all of their radio stations, which includes the identical sort of content on the market on satellite radio. Each the iPhone and Blackberry, and currently others, are capable of receiving streamed music. Pandora and Slacker are two alternative competitors that provide on-line listening, however don't offer live DKs, news or talk radio.
So, what has been the real result therefore far? Well, each companies used huge star power to lure shoppers to their particular company. Now the patron will have the best of both Sirius and XM when it involves Oprah, Howard Stern, Bob Dylan and others. The identical holds true for sports. The NFL and NASCAR were on Sirius and MLB, NHL, PGA and Indy Racing were on XM. There was some confusion as so much as programming changes, however not enough for people to drop their subscriptions en masse. Evidently the prior Sirius subscribers want the BEAT came back and prior XM subscribers want BPM back.
There's little question that there will be more changes. This new company is, in effect, still in its infancy regardless of the combined experience. There will be bugs to determine and a brand new way of doing business, but you'll be able to be certain that Sirius XM Satellite Radio is betting on success.
Author Resource:-
Todd Sanders has been writing articles online for nearly 2 years now. Not only does this author specialize in radio,you can also check out his latest website about:
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