Space. The final frontier. These are the voyages of Sirius-XM. Its continuing mission: to explore strange new anti-consumer practices. To seek out new revenue streams and crowd out new competitors. To boldly safeguard the dangerous monopoly granted last night by the FCC.
Or something like that.
The Commission approved the controversial merger last night on a 3-2 party-line vote. The nation’s only two satellite radio operators have agreed to abide by several voluntarily conditions:
- Consumers will be able to purchase small a la carte packages.
- Third parties will be allowed to design and sell their own receivers.
- Sirius-XM will soon rollout an interoperable receiver that can receive signals from both companies.
- 4% of the new conglomerate’s channels will be reserved for public interest programming.
- No price hikes for three years.
The company earned Republican Commissioner Deborah Tate’s swing vote after agreeing to make a $19.7 million payoff “voluntary contribution” to the FCC for violating Commission regulations.
The two Democratic Commissioners were receptive to a merger, but voted against the deal after the companies refused to offer strong consumer protections.
“I was hoping to forge a bipartisan solution that would offer consumers more diversity in programming, better price protection, greater choices among innovative devices and real competition with digital radio,” Adelstein declared. “Instead, it appears they’re going to get a monopoly with window dressing. We missed a great opportunity to reach a bipartisan agreement that would have benefited the American people.”
Last week, Adelstein told reporters that he’d back the proposed union if the two parties honored a six-year price cap, include digital radio in all tuners, and “make one-quarter of their satellite capacity available for public interest and minority programming.”
Both Sirius and XM received their satellite radio licenses from the FCC in 1997 under the condition that they never merge.
Satellite Radio Merger Approved [Washington Post]
Report: FCC set to approve XM Radio-Sirius merger (updated) [Ars Technica]
PREVIOUSLY: XM-Sirius Merger Will Double Monthly Prices?
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I can’t believe there isn’t at least one satellite radio hater in this bunch. I’ll go. I had XM for one mediocre year recently.
Chintzy equipment (it’ll cost you at least $150 unless you find a sale), overpriced subscriptions ($13 a month to listen to the radio–nice). Programming is way more repetitious than I’d expected. They’d play the same song on 2 different channels, 20 minutes apart. Some music channels started playing C-sides, just awful stuff. XM is clearly budgeting its royalty payments carefully.
Talk stations have plenty of commercials, as much as any Clear Channel station. Only the music stations are commercial free. However, XM provides the music channels the impression of having commercials by frequently interrupting the music to advertise their own content–other channels, XM in general. Preacher, meet choir–now quit wasting my earspace.
The equipment is unwieldy (and overpriced, considering what most radios cost these days). You are tethered to the receivers’ multiple wires–power, connections to the docking station, to your stereo, to the antenna. This is not your daddy’s transistor radio–more like dragging around a tesla coil. Do you want to have separate radios in your house and your car? That will be two subscriptions, please. Subscriptions are tied to the equipment, not to you.
If you don’t do professional installation in your car, you have about 200 feet of wire clotting the passenger seat and floor. The “portable” devices are expensive ($300) and have odd restrictions on their use that they never tell you about beforehand. Most “portables” don’t actually let you listen to radio as it is broadcast–the portables download the shows and let you play them back. If you don’t like what you downloaded, you’re outta luck. They also fail in the reception department.
Customer service is straight outta Mumbai, incoherent and unhelpful. Overcharges happen and aren’t corrected. Emails go unreturned. Wires fray and disconnect even though they aren’t handled at all. Silence is easier than XM.
Basically, looking at this from just a ‘music service’ standpoint is very short-sighted. 100.5 on your FM dial is more than a place to hear music. It’s a place that also is indebted to your community (by its FCC-approved operating license) to provide news and information, especially during emergencies.
While the satellite operators don’t have the same obligations, the essentially hold the same control over public information.
About time! Long live Baba Booey
“4% of the new conglomerate’s channels will be reserved for public interest programming.”
Consumerist channel?
Please, Gawker?
@EyeHeartPie: And I quote, “THANK GOD WE’RE A MONOPOLY!”
In related news, insiders report that Clear Channel is in negotiations to acquire the XM-Sirius merger for an undisclosed sum.
Just kidding. But I would be willing to wager $20 for long odds on this.
It’s nice to see that, in the sunset of The Permanent Republican Majority, the GOP is doing their best to help their constituency. Maybe Clear Channel can acquire these guys and make it a trifecta?
That way, public airwaves will be completely useless to US consumers.
I never bought into the whole HD radio craze…hey remember when there weren’t commercials on cable TV either (with a much lower price?). It’s only a matter of time before the same thing happens and it’s no better than the typical FM station. I actually like my local FM stations instead of generic voiceovers coming out of a satellite somewhere.
Let’s see. Pay services. If you don’t like them, don’t buy them.
How does being a monopoly force people into buying their service again?
i really love my sirius radio (and howard) and anything (such as a merger) that enables me to keep the service running will make me very happy.
Actually, ClearChannel has had a very minority stake in XM all along. In return, they had control of about a half-dozen channels, with which they’ve done their best to drive away listeners.
Also, they are allowed to make price hikes at any point, as long as they are for programming cost increases. So you’ll be paying $19.95 a month, but you’ll still get Howard Stern.
Screw SatRad.
I can listen to FREE music on my ipod thank you very much.
@MorrisseyTheCat: @EyeHeartPie: @TechnoDestructo:
From Wikipedia:
In Economics, a monopoly (or “Pure oligopoly”) exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.
[en.wikipedia.org]
The main debate between the few NAB stockholders/lobbyists and everyone else (Department of Justice, FCC, Sirius/XM listeners, economists, investers, etc.) is what the “good or service” is. The NAB-huggers keep saying that it is purely the delivery medium – satellite radio. No one who listens to satellite radio gives a shit that they are listening to radio waves from space. Not at all. What they are listening to is Howard Stern, the NFL, MLB, and most importantly – commercial free music. That is the service that people are getting. CONTENT is what is at stake here.
Satellite radio is, by no means, the only provider of content in town. People download music to their ipods everyday. I listen to Internet radio stations on my mobile phone whenver I am on travel.
And btw…if this so called “monopoly” is going to stifle innovation, how come HD radio just miraculously appeared after Stern went to Sirius? HD radio is based on OLD technology that has existed for YEARS. It is because terrestrial radio didn’t have any broadcast competition. Now they do. This is now a moot point. All those people shorting Sirius and XM stock are just going to have to suck up the loss.
I agree neither are compelling. Been there, tried that. They can have it. Both have terrible audio quality. Similar to 96Kbps mp3s, but with less depth! Silly to pay a monthly fee for the sound of a $10 transistor radio.
I suppose the talk radio could be worth it to some, but take away the music and their cost/channel goes to the moon.
Back OT, this monopoly sell-out is minor compared to others from the last 8ish years.
“So little time, so much left to screw up.”
@Pro-Pain: AM Radio still exists. And sometimes it can be really great. If you live in a flatter area, sometimes you can get ‘skip’ waves and catch regional broadcasting from clear across the nation. Where I live in MI, I seemed in a great location to catch the occasional bursts of radio from Alabama and Louisiana.
NPR, crazy religion and very format specific (esp. in urban areas) radio stations tend to live on the AM band. When I drove to my new digs in WY from MI I caught a lot of AM radio in Nebraska that was essentially Farm Auction Radio. And something called the “Truckers Network”. Fascinating stuff, actually.
I used to be in a touring rock band and after shows and especially after studio recording we’d almost always pick AM radio. Truckers Network or AM Gold stations. Some mono recordings from back in the days of AM radio that haven’t been enhanced for stereo/re-mastered sound great – especially late at night. We called it “the vinyl argument” as some of the arguments for AM gold songs sounding good on crappy AM radio were some of the same arguments made for vinyl.
(disclaimer: Majored in Telecom and former radio jock)
As someone who’s worked in the radio business, and as a current XM subscriber, calling the satellite merger a “dangerous monopoly” is laughable. Carey, you should be admonished by Meg and Ben for what could be termed as “yellow journalism”.
The 19.7 million payoff was a fine for XM’s repeaters, an issue they had been fined for before.
You want to talk payoffs? Look at what the NAB had been doing to try and block the merger. You want to talk about dangerous? You talk about the smear campaign the NAB was trying to pull off to stop this, using secondary companies and fronts to try and make it look like it wasn’t just the NAB against this.
Both companies were losing ton of money. Both companies are niche entertainment that will be affected by WiMAX 10 years down the road.
Bottom line: It’s not dangerous, it was needed in order to keep 20 million Americans entertained. Because if the merger didn’t happen, both companies would have been out of business by the end of 2009.
BTW, does anyone understand how asinine it is to demand 25% of a spectrum dedicated to minority and public interest programming?
Let’s say your basic cable network has 100 channels. 25 of those channels would have to be minority and public interest. Do you see how unfeasible that is?
The other caveat was having radios being able to receive both carriers. They can already do that. The radios as of right now are designed to pick up their own satellites; not the specific content that’s put THROUGH those satellites. That can be adjusted on the ground.
It goes to show how the older generation of government (specifically John Kerry) doesn’t understand how technology works.
I’ve watched this merger since it was announced. Carey decided to report on it after doing all of 10 minutes of research. Good job.
Oh, and Ron and Fez, noon-3, XM 202.
@BuddyGuyMontag: “Bottom line: It’s not dangerous, it was needed in order to keep 20 million Americans entertained. Because if the merger didn’t happen, both companies would have been out of business by the end of 2009.”
Exactly. And the single company might still be by 2012, regardless. If one hadn’t bought the other, at least one of them would have went out of business anyway, leaving a “monopoly”.
@intellivised:I grew up in the South and used to listen to Midwestern AM stations at night. Unfortunately, high-powered Mexican stations and digital AM are making it harder than ever.
It’s still amazing to hear things live on radio; it still is faster than websites or cable TV with most local breaking news. I was listening to WWL-AM the night Katrina hit; it got worse and worse until their power finally went out. I’ll never forget that.
It came back the next night, and people were calling the station for help on their cellphones. It was the only good source of local information for weeks. They ended up simulcasting on five stations, even.
About a week or so after the hurricane, one talk show host got irritated at a caller early one morning and went off. He was fired and never heard from again.
I am Sirius….
And don’t call me Shirley..
AWESOME!!! now I can listen to Opie and Anthony and Haward Stern all in convient service! sweet!
All this monopoly talk would be more sincere if Clear Channel didn’t effectively have a monopoly on radio as it is. Clear Channel was just bought by private equity, their business model is in freefall as it is. The payola, back room deals and lack of local content has killed radio. I don’t need Rush Limbaugh on 4 stations at the same time in my market. Consumers will be running away from this in droves. It’s a shame too because XM was inching to profitability even though Sirius has Stern, which is reason alone to subscribe. The sat companies will eventually abandon one spectrum/sat system for another leaving one spectrum available for purchase. If sat radio survives it might actually force these terrestrial stations to hire LOCAL DJs and do LOCAL programming.
@bitplayer: Kind of ironic, that the very changes caused by Clear Channel result in CC’s destruction.
The thing that’s sad is that FM radio WAS a great way for new music to get out: 1,000s of mini-laboratories across the country, all with a different voice. Sooner or later, a new genre would stick, break through and we’d all benefit.
If either of these SatRadio stations fail, they should be forced to give the spectrum back to the public for free. It’s obscene that executives that stupid should get a windfall from simply selling the spectrum they wasted.
Omg.. I cannot believe that the US gov. wasted 18 plus months for this. Yet.. they let Exxon Mobile Merge in less than a couple months? I am so happy I will finally be able to get a GM product with Factory Sirius. Televiper are you a shill for the NAB? Anyone I know that has sat radio hasnt listened to normal radio in months. Its hear to stay, and thank god uncensored..
@Televiper: …except that pretty much everyone has FM/AM options. Satellite radio may not have that traffic and weather, but you have it, along with satellite radio. I don’t have satellite now (I’m waiting for the new plans and receivers), but I only go over-the-air when weather is bad.
Talk shows are carried by the sat providers. Other programming has generally sucked, and caused demand for satellite radio, since companies like Clear Channel started taking over. Promotion of local acts? Gone. Promotion of new acts coming to the area? Gone. Any public interest beyond advertising local clubs? Gone, exept for required weather stuff.
@ChuckECheese: cost and repetition are problems, and are the same on Sirius and XM. OTOH, one of the saving graces, to people like me, is what you call their playing “C sides.” As someone who generally buys and listens to albums, this a very good thing. How often will your local rock station play a country Rolling Stones song, as one example?
I don’t see how installation should be a problem, except getting the antenna out of the car while keeping a seal. If you have more than power draped around, you should think about doing it over. Doing anything right takes time.
Yeah, totally OT, but recordings should be one with everyone in the same room, playing and being recorded at the same time, and without insane compression applied to the final product.
Every time I read “a la carte packages” I cringe.
I used to live in a place where the local cable company set up their digital channels that way in order to save people money, or say they said.
Would you like the “Science channel”? Sure, sign up for the hobbies package that would include the Golf channel and the DIY channel. Wait, what?
How about the “Gameshow Network?” Alright, sign up for the package that also includes the Disney channel and MTV Tres.
It was a headache, I had to end up missing out on some channels that I wanted, and I ended up paying more than before they went a la carte.
I ended up canceling my entire digital line up.
I’m afraid that the same thing is going to happen with XM/Sirius in time. Except that now my alternative will be to return to the horrible over the air radio.
The channels with the mandated content really irk me. Who do you think knows what their customers want: the satellite radio companies themselves or the massive bureaucracy of the FCC? Sirius alone was already offering channels for kids, women, gays, lesbians, and various religious content.
A quick Google shows that out of the the total population of the US, 20% of us aren’t white and 7% of us have satellite radio. Based solely on those numbers, that means that satellite radio already has over 4 million minority customers, amonst which I count myself. If we weren’t getting suitable programming, do you really think we’d be shelling out $12 a month for it?
Apparently all of us in America need the federal government to step in and mandate that a company offer a specific amount of programming to one type of person or another. Apparently we minorities are too dumb to choose what entertainment services to purchase, what radio stations to listen to and what content to be entertained by. Legislation like this is an insult to everybody involved in these companies from the top down.
Cancelled as of middle of next month after over 5 years of being with XM. I won’t give a dime to a degenerate hack like H.S., nor his enabler, Mel Karmazi.
I’ll be a part of the underground syndication syndicate of XM 202.
R&F 12-3
what is it about the internet that makes things so extreme?
i bet guys at the doj, ftc, fcc are reading this and thinking: wow, great point, we never considered if this would be a monopoly or not…
all this monopoly talk would be more sincire if people knew what a monopoly was and knew that monopolies aren’t illegal
What’s the big deal with the “monopoly”? If they hike the prices in a few years/have shitty service, then people will stop using them and listen to radio/bring their ipods in the car. If they hike the prices and people pay out the ass, well, that’s because they’re willing to pay for it. No problem whatsoever.
@milkcartel: QFT. Would it be better if there were competition in the market? Perhaps. But the consumer doesn’t have the “right” to this. People have such a knee jerk reaction to this. If only Sirius had launched or XM had failed, would the government force them to shut down? This isn’t big pharma charging $500 per new pill that the government patented. Sure, they’ll have a “space” monopoly, and if the customers really don’t like it, terrestrial radio/other options. I’m not one who sympathizes with big corporations on a regular basis, but for serious, what’s the problem here?
Why the hate for satellite radio? Oooo! You have an iPod and get ‘free’ music. So this merger does not affect you.
I have had Sirius since Howard switched over. I really don’t Howard anymore. But music without commercials is a big plus. The only terrestrial radio I listen to is: WBZ-AM, WFNX and the Mike radio station on a whim.
The content is what really sells the product. Howard, Martha, NFL, NASCAR, Comedy, News, Left/Right Wing-talk, Traffic, Weather, Playboy. God there are at least 40-50 channels I’ve never even listened to because the music is not my favorite. $20.00 a month for one radio in my lab and another in my car; plus web access? I’d give up cable TV before my Sirius.
And you know what, I own several mp3 players; and, Alpine unit that does MP3/WMA CDs, Satellite, AM/FM and HD (with applicable tuners),
@xkevin108x: you seem to be laboring under the assumption that broadcasters are feisty free-marketers, trying to do their best while asking nothing from the gov’t. The opposite is true: their entire business model is based on their monopolizing of incredibly scarce public resources – a chunk of the spectrum. It is literally a Federal crime for another member of the public to use “their” spectrum. It’s as far removed from “feisty free-marketers” as can be imagined.
They walk into this arrangement with their eyes open. So they can’t whine when conditions are placed on their sweetheart deals.
@lingum: You are a thief and scum then.
I hate the Boston Red Sox. XM has a huge contract with Major League Baseball. Money I pay goes to the Red Sox. You don’t hear me complaining.
I mean I don’t listen to Stern, but I don’t mind that he’s around.
And you might want to check your history, friend. The Mel Karmazin-run CBS went out of their way to keep Ron and Fez employed when O&A blew up WNEW in 2002.
@Trai_Dep:
“It is literally a Federal crime for another member of the public to use “their” spectrum.”
I know, such a pain. Kind of like how it’s literally a crime for me to use other types of property someone else owns like FedEx’s vans.
Spectrum is auctioned by the government, broadcasters pay the public to use the public resource. It’s actually the government that has the monopoly on spectrum which is why it’s so expensive.
i can’t wait… just think about having every team’s home AND away city coverage from EVERY major professional and collegiate sport in one place.
I know which ‘a la carte’ package I’m getting. All of my steelers and penguins coverage at last. (necessary since I’m stuck in the armpit of the nation)
Monopolies In Space sums it up.
And people are confusing terrestial or FREE radio broadcasting with different forms or formats of stuff like music.Yes stuff like a CD is a DEFACTO form of competiton for satillite or PAY radio but is NOT direct competition.The issue is use of the PUBLIC airwaves using a specific frequency or bandwith and NOT all these DEFACTO forms of competition everyone is bantering about.
This why I had to laugh at the likes of Jim Cramer who confused or twisted the issue by telling his audience that terrestial or FREE radio was “afraid” of subscriber radio or the enemy.I think it’s the other way around if anything.Subscriber radio voluntarily decided to “compete” against free radio in a DIFFERENT format.They’re the ones who took it to a DIFFERENT level by charging for what many used to get for free.
This merger for the time being is a true monopoly and NOT the defacto competition or victim it’s potraying itself to be.
@u1itn0w2day: No it isn’t a true monopoly becuase there are close substitutes to restrict market-power. Substitutes are defined by observed cross price elasticities, not internet people’s opinions.
I have had Sirius for a few years and if the price went up or the content failed me, I still never would have even considered XM, so they were already a monopoly to me. If the merger fails or the price goes up, I will go back to listening to cd’s or audiobooks in the car. Terrestrial radio has sucked for a long time now, which is why they had to fight this so hard. The idea of producing a product that people would actually pay to listen to is a mind blower to them. They can’t even produce something that people will take for free.
@rainmkr:
That maybe true, but if it’s going to be one sat. radio company then why do they still need both broadcast licenses? Let them join, but make them give up one of the licenses so another sat. radio company can make a go of it. If they choose to not pay Hoo-Hoo howie or Oprah’s salary they might even be able to make a profit.
I don’t get why all these commenters care if it is a monopoly or not for Satelite Radio. As of now, it is a fee-for-service based industry. We do not have to pay for it, just like cable (until Dtv takes over in 02/09), you only pay for it if you want to.
I pay for it because I want the option of hearing music that is more specifically programmed for my tastes. No one is holding a gun to my head and forcing me to pay for it.
My girlfriend has Sirius in her car. I have XM in my truck. Places where Sirius lacks (pop top 40s shit that my gf likes), XM is better. Places where XM lacks (rock channels), Sirius is better. Once we get combined programming, the service will be better. I’ve had XM in my vehicles for 4 years, and every vehicle I own until I die or satellite radio dies will have some form of it.
Monopoly it may be, but I hate commercials so much that I don’t care – I don’t care what Rush, or Howard, or Sean have to say, either – I want to hear music. The $13 is worth it to me. I have the small Roady XT receiver that plugs in – I use it in two cars and used to use it in the office. Now I use their streaming Vista sidebar gadget to get my music at the PC, and it’s all good.
But I really don’t see this as a monopoly. I see it as another form of radio. If WKLS in Atlanta would let me pay them a monthly fee for no commercials (and go back to the old classic format), they could get some of my bucks. Too bad they are not set up for custom delivery.
I am dismayed at what terrestrial radio has become. Is a nationwide network of radio stations playing the same tired crap any less a monopoly? We have all seen the “dumbing down” of FM radio. I’ll continue to get my XM fix, and if Sirius brings something else that I find I like, that’s FINE.
(I use Pandora and OurStage to discover new music.)
Areas with high speed internet service: Not a Monopoly.
Areas that can only get dial up (and satellite ISPs are only better than dial up): It is a monopoly.
It’s also a monopoly to all of those people who spend their days in a car or truck.
And forget about standard radio, the choices are disappearing. Returned to my big hometown and all of the variety was gone (had they jumped to HD only radio? don’t know.) Fewer stations and half of them were Hispanic.
I wouldn’t agree with the NAB because the sat.subs are still pretty low, but in terms of content AM/FM is dead. Ad-based radio is unlistenable.
Ron and Fez: Noon-3 XM202.
It doesn’t make you a bad person.