"If the two leaders in satellite television were denied their shot, what makes anyone think that the only two players in satellite radio will get a chance to snuggle?"
-- Rick Munarriz, five minutes ago
That would be a great argument if it were relevant. Here's why it isn't:
2002: Satellite TV vs. Cable TV
|
Metric |
Satellite |
Cable |
|---|---|---|
|
Net subscribers |
18 million |
70 million |
|
Portion of total |
20.5% |
79.5% |
2007: Satellite Radio vs. Web and Terrestrial Radio
|
Metric |
Satellite |
Web |
Terrestrial |
|---|---|---|---|
|
Net listeners |
14 million |
65 million |
228 million |
|
Portion of total |
4.6% |
21.2% |
74.2% |
EchoStar
Howard and Oprah should get hitched
And who says that subscribers wouldn't pay to get both Stern and Oprah? Well, OK, bad example. How about Stern and Opie & Anthony?
You get my point. Content is the allure of satellite radio. This merger is appealing because it would end the over-the-top spending required to attract, and retain, talent.
But even if cross-platform subscribers are few, there's a powerful incentive for both Sirius and XM to make it easier for a listener to get started. Common equipment would achieve that.
What's more, a common receiver could probably be made to stream Sirius and XM when WiMax technology goes live across the country. Without that, drivers would be more likely to forgo $13 a month for satrad and keep to AM, FM, and a streaming stub for other programming when they're in range of a WiMax tower.
Rick's right; Sirius and XM have been treading water in the ocean. But they haven't embraced. They've simply decided to climb aboard the Good Ship Merger. That should be more than enough to keep the pair afloat for years -- unless, that is, the feds decide to torpedo the raft. I, for one, hope they don't.
- Read the bull argument
- Read the bear argument
- Read the bearish rebuttal
- Rate XM or Sirius (or both!) at Motley Fool CAPS
- Vote for the winner
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Fool contributor Tim Beyers, ranked 775 out of more than 23,500 in our CAPS investor-intelligence database, likes his radio streamed, not downloaded. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. All of Tim's portfolio holdings can be found at his Fool profile. His thoughts on growth stocks, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy tunes in accountability.
