SIRI / XM Prepare Merger Announcement (Feb. 19)

Discussion in 'Mobile Phones / Entertainment' started by Chris, Feb 19, 2007.

  1. Chris

    Chris Lead Actor

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    http://www.nypost.com/seven/02192007...ter_lauria.htm

    While still speculative, several sources (Fox, BusinessWeek, NY Post) are now reporting that an announcement is imminent today. The agreement, which retains mostly SIRI management staff, unifies 12 million subscribers under one umbrella and provides a significant lift in bandwidth, as duplicated bandwidth can be unified and make way for different content.

    (admin: please edit my thread title, screwed that up with the )
     
  2. Blu

    Blu Screenwriter

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    I guess it is way to early to speculate how this will effect our current hardware.

    I mean if they start combining channels there will have to be a major restructuring/combining of the channels right?

    Maybe they will put the NFL channel next to the MLB channel for example.
     
  3. Chris

    Chris Lead Actor

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    A merger would result in a yearly savings of about $7B, some analysts figure, which immediately boosts profitability. Because you'd be able to share satellite space, a phase it would allow both signal types to carry the new unified programming.

    Some changes that would be certain to happen:

    * Code-Share enterprises would dissappear. A merger would basically call for an end agreements with terrestrial radio providers, so commercials would be gone, and there would be no more channels programmed to match ala XM now.
    * Other Code-Share enterprises would be bought out. Mark it: CBS radio would immediately buy out O&A's contract and make them a terrestrial exclusive. Exposure to a much larger satellite base as well as the fact that a merged company would have a far more effective means to sell ads would almost require CBS to make the move to not share content with the new satellite company. I see lots of threads talking about Howard or O&A want this or that, forget all of it.. if there is a merger, CBS will be the one who pulls the strings and makes O&A go terrestrial just to protect their value to CBS.
    * They would instantly be the largest marketplace for full-sports feeds. MLB, NFL, NASCAR, NHL, and many college sports would be unified under a single provider.
    * Both have strong resources in combination satellite & terrestrial technology; unification of those helps compliment the strengths of each other and shore up weaknesses.
    * If they were ever going to merge, pressure is now. The current FCC board has said they would greenlight it after originally saying they wouldn't. So they know they can get it done. There are no certainties that a future board appointed by an unknown future president will have such similar feelings. Figuring a 12-month to 15-month window for full FCC clearance, they would have to get this announced before the end of the month in order to guarantee completion before the 2008 election cycle begins in full (Summer 2008) to prevent it from being tabled for political reasons.
     
  4. Blu

    Blu Screenwriter

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    While a unified sports entity really makes this attractive it also would put pressure on the company to raise the monthly price.
    There would be no reason not to since they wouldn't have to compete with anyone else.

    Color me mixed emotional.
     
  5. Brent T

    Brent T Second Unit

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    I believe they will hold off on raising the price however as with all things its bound to happen.

    As I have said before XM isnt the enemy, its old fashion radio and hopefully with both services combined they will offer us an even bigger and better pay service.
     
  6. Blu

    Blu Screenwriter

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    I don't think of XM as an enemy, I just think that we as consumers are better served by two competing services.

    Although I am intrigued by the idea of all of the sports under one roof.
     
  7. Brent T

    Brent T Second Unit

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    I use to believe that, however I think XM is the small competitor, the major competition is and always will be old fashion radio. Sirius's goal is to take people from "free" radio, not from XM. You can see that by what they have done with their talent.

    Sirius/XM still have a lot of work to do because of the major competition, so I dont think we will have much to worry about as far as a competitive market situation.
     
  8. James St

    James St Supporting Actor

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    Official...

     
  9. Kevin Crays

    Kevin Crays Agent

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    That may be where they want grab listeners from, but that's not their competitor. They compete against each other to get subscribers. Once there's only one pay service, those who want such a service will be held hostage to the lone provider. This is no different than Cable in most markets (though Sat has slowed increases somewhat).

    Monopolies are always bad for consumers and terrestrial radio isn't an option for those that want something other than hot country, classic rock, modern rock, rap, R&B and CHR (and in some markets they don't have those options) formats that typically have very small playlists.
     
  10. WillG

    WillG Producer

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    Oh boy. I'm not sure this seems good for XM subscribers and O&A fans. I went with XM because they had the reputation for being deeper in their music selections whereas Sirius had more of an FM without commercials approach. I got into satellite in the first place because I wanted to escape the repeatedness of FM radio. It seems as if more of the Sirius management will be retained than XM. As for O&A, this can't be good for them. Karmazin and Stern and O&A already hate each other. Howard will once again be able to have them gagged if he wants to. And that is even if they stay a part of the new company, which might not happen due to CBS's stake in them.


    While this might seem like a nice idea, the suspicious person in me suspects that this could be a way to charge premiums for certain sports, Stern and O&A (if they remain a part of the company)
     
  11. Chris

    Chris Lead Actor

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    There is NO WAY in the world CBS will not immediately move to buy out O&A's contract from XM. They would be idiots to let O&A stay in a merged company.. There will be incredible pressure going on there to make O&A leave.. NOW or very soon in order for CBS to distance itself and for it to not time-share or in any way promote an entity that will be merged, growing, and make up a considerable marketshare.
     
  12. Todd Henry

    Todd Henry Second Unit

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    The ala carte information is interesting. I wonder if each sport might be a separate option much like Extra Innings/Sunday Ticket today.
     
  13. Jeff Gatie

    Jeff Gatie Lead Actor

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    I hope so. But it will probably be more like cable TV, with "packages" rather than a per channel charge. I'd probably make out on the per channel thing. Give me Stern, Fox News and Talk, Patriot, The Bridge, Underground Garage, First Wave, the new 90's Alt, Standards (Sinatra), Coffeehouse, the Christmas music and the new Punk Channel and I'm all set.

    Still, I like having all the channels to choose from and hate to think I'm missing a good genre because of price.
     
  14. Chris

    Chris Lead Actor

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    Another confirm, more details. Basically as I thought.. since SIRI has a larger cap value, they will be named as buying out XM, and it appears as though the SIRIUS product name is what will survive.

    (post #1)

    http://www.bloomberg.com/apps/news?...l6qM&refer=home

    Sirius to Acquire Larger Rival XM for $4.57 Billion (Update1)

     
  15. Brent T

    Brent T Second Unit

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    Couldn't disagree more. Free radio is their competition. Sirius and XM had to convince consumers that there was a product available that is worth paying for. These consumers are use to getting this service for free since the dawn of the radio. Sure XM and Sirius were in competition but the bigger competitor was free radio. This is a new medium and those who choose to join one of these services in such an early stage were niche consumers, thats not who these companies were after, well at least not Sirius. Sirius vs XM is just a small battle in the war that is a pay service vs. a free service.

    Terrestrial radio not being an option as you put it is a bit absurd in my opinion. You have an option as a consumer pay for what you believe to be a better product or stick with the product that has almost zero monetary cost to you.
    People aren't forced to have cable tv, satellite tv, or satellite radio. Its just that they are better options in most cases. I would have a hard time buying Sirius being a monopoly when I can tune in and hear hockey, football, baseball, music, talk radio all for free.
     
  16. Blu

    Blu Screenwriter

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    Xirius or SM?

    Or will the brand name stay as Sirius?
     
  17. Chris

    Chris Lead Actor

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    Brand will apparently become SIRIUS.
     
  18. James St

    James St Supporting Actor

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    From Bloomberg...

     
  19. Henry Gale

    Henry Gale Producer

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    By Laura Petrecca, USA TODAY
    Satellite radio giants XM (XMSR) and Sirius (XMSR), once fierce rivals, announced on Monday that they will combine forces in an all-stock merger.

    The deal is structured as a "merger of equals" with XM stockholders getting 4.6 shares of Sirius common stock for each share of XM stock. XM and Sirius shareholders will each own 50% of the new company.

    On Friday, XM closed at $13.98 a share and Sirius closed at $3.70.

    Sirius CEO Mel Karmazin will become CEO of the combined entity, which does not yet have a name. XM Chairman Gary Parsons will be chairman.
     
  20. Karynak

    Karynak Stunt Coordinator

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    I hope this does not and will not in the future affect my lifetime subscription. That is actually my main concern. Otherwise, my lawyer will get more work.
     

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