Once again, patience pays for those in favor of a successful merger between XM (Nasdaq: XMSR ) and Sirius (Nasdaq: SIRI ) . The two satellite radio providers announced their plans to combine exactly 13 months ago, but the competitive landscape keeps changing as they wait for regulators to bless the union.
Yesterday, media stories of Apple's (Nasdaq: AAPL ) alleged push into music subscription services made it less likely that monopolistic concerns would kill the proposed merger between XM and Sirius.
Think about it. If Apple begins offering unlimited access to its iTunes music catalog -- at a price point substantially lower than $13 a month -- how can one argue that Sirius and XM have the market cornered when it comes to premium radio?
There are far more iPod users than there are satellite radio subscribers. Apple also expects to sell 10 million iPhones by the end of the year, more than the number of active subscribers for either XM or Sirius.
Now that many new cars offer input jacks to broadcast media player content through car stereo systems, won't that compete with the commercial-free digital music that makes satellite radio so appealing?
Yes, XM also offers ad-saddled talk programming, traffic, and weather, but terrestrial radio can fill that void with local programming.
The FCC and the Department of Justice could be doing a disservice to XM and Sirius by keeping them apart for nearly 400 days, but they have done the deal a favor. XM and Sirius have amassed a larger subscriber base -- now 17.3 million between them and counting -- and the argument of the deal being anticompetitive gets funnier with every third-party application.
For instance, have you seen the TiVo (Nasdaq: TIVO ) ads with the guy coming out of the shower as Sara Bareilles sings and plays piano? It promotes RealNetworks' (Nasdaq: RNWK ) Rhapsody unlimited music streaming service that's now available through your TiVo box.
Surely you've seen the "Play artist, Michael Bolton" Ford (NYSE: F ) spots, promoting the fact that Ford's Focus cars now have hard drives powered by Microsoft's (Nasdaq: MSFT ) Sync voice recognition digital music retrieval system.
If Apple is serious about iTunes Unlimited, you know it won't be long before it hits the market with its own wave of stylish ads. And you know Apple has an uncanny knack for making its commercials stick to your memory like peanut butter on white bread.
These memorable ad campaigns didn't exist when XM and Sirius first got together. The products and services didn't exist in the marketplace. So much has changed in the past 13 months.
The XM and Sirius merger is nowhere near done, but every new innovation makes the regulators look that much more ignorant if they do kill the deal.
Other XM stories on its long courtship with Sirius: