The finish line is within sight for XM Satellite Radio
Not everyone is a happy camper, though.
"Satellite radio customers may remember July 24, 2008 as a dark day," writes Marketwatch analyst Jon Friedman this morning, suggesting that the "competition-busting combination will hurt the public" if Sirius and XM scale back on service and programming, and go hog wild greedy on pricing.
I couldn't disagree more, and I'm somebody who usually finds myself agreeing with Friedman. If Sirius and XM operated in a vacuum and consumers had no choice but to pay for premium radio, he would be right. That is certainly not the case, and I'm not the only one who sees it that way.
Modern day warrior, mean mean stride
Why did Clear Channel
And since Clear Channel is paying up ahead of the Sirius-XM wedding vows, isn't that also an admission that terrestrial and satellite are, in fact, competitors? Does Friedman really believe that Sirius and XM would let Howard Stern, Oprah Winfrey, and Martha Stewart Living Omnimedia's
Will Sirius and XM have a little more flexibility in the actual negotiations? Sure. When it comes time to re-sign talent or extend deals with sport leagues, it won't be a matter of Sirius bidding against XM. It will be more like satellite radio competing against terrestrial radio, Internet radio, cable networks, and niche audio specialists like Amazon.com's
Maybe it will be slightly cheaper for a combined Sirius-XM to attract magnetic personalities, but how does that hurt consumers unless your name is Oprah? If Sirius and XM have a little more legroom in negotiating deals with automakers as the best way to generate recurring revenue-sharing revenue with showroom operators, how is that bad for drivers unless your name is Ford?
Though his mind is not for rent
Today -- or whenever this drawn-out deal gets approved -- will be a great day for consumers. With or without the three-year freeze on subscription rates, Sirius and XM have to keep their prices honest. If plan prices go too high -- or the perceived value of the content gets too low -- satellite receivers become costly dashboard paperweights.
Sirius and XM are closing in on a collective 20 million subscribers and none of them -- save for perhaps those who paid up for the one-time lifetime membership at Sirius -- are forced to take whatever satellite dishes out at them.
Friedman suggests that Sirius-XM would cut corners "because it's the only game in town" but how is that even possible? Consumers know that they can turn to terrestrial radio, fire up their CD collections, or even plug in their Apple
Need proof that you can't take being the only player in town for granted? Check in on WorldSpace
Sirius and XM have already agreed to offer half-priced a la carte plans within a year of the deal's completion, but I would venture to guess that it is something that the satrad players would have offered up on their own anyway.
How can dark days be ahead when cross-programming will open up options and custom-tailored flexibility? How can things appear bleak for radio fans when the perpetually enlightened non-terrestrial competition will make Sirius-XM try even harder to make sure that it can scale its audience to make the most of the deal's promised synergies?
Bashing the Sirius-XM deal is getting as old as the deal itself. Head on elsewhere, as the Teflon coating is nearly complete.
More news than static on the Sirius-XM delays:
Longtime Fool contributor Rick Munarriz is today's Tom Sawyer, subscribing to both XM and Sirius. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
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