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Satellite Radio Merger: The Beginning of the End?
Sirius and XM have finally joined forces, but is this good news for listeners?
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November 19, 2008 | by Richard M. Sherwin

I feel really, really bad both professionally and personally that satellite radio is going away. What? You say the merger will preserve the longest running alternative to the slowly dying, little choice over-commercialized terrestrial radio? I don’t think so!

No matter how this transition pans out, satellite radio will never be the same. Last week’s morphing of music and other radio content may do little to prevent the real fans of satellite radio from eventually walking away from the dial.

A few months ago, the Federal Communications Commission and other federal groups gave the final go-ahead to the merger of Sirius and XM Satellite- radio. They waxed poetic that these two companies may not survive the onslaught of other digital music/radio systems. Because of the new devices and the overall migration of radio and audio content to many other venues, this merger did not constitute a monopoly.

And realistically despite my use and admiration (along with 19 million others) of satellite radio, the alternatives including MP3 players, mobile phones with audio capabilities, HD Radio, Internet Radio and hybrid radio services like Rhapsody, Pandora, Last FM now offer plenty of choices that could be better and cheaper. And these alternatives could prove too much competition to make the merged companies a success. And eventually, the XM-Sirius combo may actually be forced to foreclose on more programming.

The Programming
In the merger, the smaller company Sirius wound–up owning the deal. In the last few weeks, many of the marketing and programming people were let go from XM radio…despite the fact they actually started this business. Even with Howard Stern and the NFL, Sirius never caught-up to XM’s subscriber total or unique programming.

Speaking of Stern, whose success almost saved Sirius, he will never earn enough advertising dollars to pay for his lucrative contract. While Stern denies it, don’t be surprised if his former home (CBS) reaches out to the shock jock. It’s not clear yet how many of the too-much-talk/not-enough-music programs will actually survive the merger. Officials from the company claim there will be a general toning down of the obnoxious DJs.

The music channels will fall along the lines of XM’s format - 40s, 50s, 60s, 70s, 80s and 90s. The new combined programming really doesn’t have a traditional folk music channel that would feature the likes of Joan Baez, Cheryl Wheeler or even John Gorka. I was told by Sirius that the Grateful Dead are folk music. There appears to be no difference between the oldies channel and the 60s channel. It’s apparent the classical channels are programmed by a computer with a limited memory. There ARE other composers beyond Bach and Beethoven.

Sources tell me that many of the programmers of other genres, such as rock and pop, were let go. That means different interpretations, fresh and new recordings, and the reason satellite radio was great are also out the door.

What about Subscribers?
Both system’s feeble attempts to convert each other’s listeners are being handled so poorly, subscribers are left in the cold. Recently several consumer surveys and focus groups conducted by private and public entities revealed that people are not signing up for either Sirius or XM when their renewals are due. This despite the fact they feel the $10-$12 monthly fee is fair. Sales through new car purchases are also expected to suffer mightily as the recession slows the auto industry in general.

So consequently, it’s not just one naysayer’s opinion that’s triggering a revolt in the subscriber base. I am and always will be a huge supporter of satellite radio, but myself and other radio authorities are now seeing and hearing some things from these services and their respective business and content practices that are alarming.


Richard M. Sherwin - Contributing Writer
Richard Sherwin is a former syndicated technology columnist and TV/Radio analyst, who has also been a marketing executive with IBM, Philips, NBC and a chief advisor to several manufacturers and service providers.



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Comments (23) Most recent displayed first.
Posted by Paul  on  11/21/08  at  05:04 PM

Ultimately it’s about getting your attention and your money.

Posted by William Murray  on  11/21/08  at  11:38 AM

I’ve been a long-time Sirius subscriber and often lauded the service for its unique programming (which Fred questioned above). For example, they had two great channels that I listened to constantly: Boombox (which featured breakbeats and electro-rock, run by a DJ that I followed on WFNX in MA over 10 years ago) and Backspin (which featured old school rap and hip-hop). It was exactly the type of programming that you couldn’t find on terrestrial radio and I was frequently exposed to new (or forgotten) material. Not only did I listen in my car, but I used my computers at home and work to listen online. Unfortunately, both of these channels were eliminated from the combined line-up, with no clear replacement for either. I have not logged into Sirius online once since, but have in fact turned to Pandora and Last.fm instead. I know a number of people who are seriously disappointed with the new programming selections and are prepared to cancel their subscriptions, so I think Mr. Sherwin is on to something. Even I am considering canceling my account, and I have a lifetime subscription so I don’t have any payments. When people like myself start to consider turning off a service they get for free, you know that a business is in trouble. Let’s hope that Sirius hears these complaints and reevaluates its lineup before it’s too late.

Posted by Jeff  on  11/21/08  at  11:37 AM

I also have XM and Sirius, and I find them both to be great alternatives to terrestrial radio.  I hope they stay around for a long time.

Posted by Jay  on  11/21/08  at  11:30 AM

I have to agree with Fred. I have had both Sirius and XM and after the merger all the same content seems to be there. Some channels have just moved and/or been renamed. So what? Why would you drop satellite radio because of this?
For me I like having an endless variety of music on demand. Sure MP3 players are great but you get tired of your music after a while.

Posted by XM User  on  11/21/08  at  08:47 AM

Even with the combined lineup, there is still no reliable source for true headline news. CNN Headline New long ago seemed to lose sight of their original charter. It is rare to put CNNHN on and hear anything but extended commentary or in depth stories. Exacerbating this, the Weather Channel was dropped for inexplicable reasons. We have four XM subscritions now. We will almost certainly drop three of them if a good source of news headlines and weather is not provided in the near future.


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