Satellite Radio Companies Join Forces To Fight The Real Enemy
The New York Post is reporting today that a merger is imminent between XM and Sirius, the two big Satellite radio providers. Okay, the only satellite radio providers. Now instead of competing with each other, they can concentrate on losing the fight against real radio and iPods.
Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. A deal would also marry Sirius content, such as Howard Stern, Frank Sinatra and Nascar with XM’s Oprah Winfrey, Bob Dylan and Major League Baseball.
More important, analysts widely predict that a deal would also save the two companies nearly $7 billion annually.
You can’t stress that last point enough. Satellite radio has fans, but both companies are losing money providing the service to them.
The article points out that this is far from a done deal - negotiations could break down at any time. A big problem will be the wording of the deal - once it’s made, then the anti-trust people come in and go over it with a fine tooth comb. Another problem is that this is supposed to be a merger of equals, but Sirius people are likely to come out ahead of XM people. So cross your fingers.