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February 21, 2007 / Toby Dayton

XM Sirius Merger Should Be Approved

As a huge proponent of satellite radio, and a very happy customer of both companies (I use Sirius most of the time, but bought an XM portable when it beat Sirius by developing the first portable device), I hope that the announced merger this week is approved by regulators. From what I have read, the chief concern about combining the companies is that they will raise prices. Given the condition of the two companies, they probably will and should in order to create a sustainable business model. And I will happily pay whatever the price (within reason) for many, many reasons.

The content is phenomenal, the choices are enormous, the quality is very high, and other than my ipod, the choices presented by local radio are pretty anemic in comparison. I also like listening to music without any commercials, and I am very willing to pay for the privilege to continue doing so, again, within reason. And that’s the key point for regulators. If prices climb too high, I’ll turn to the other options I have and the combined company will lose me and all the other subscribers who might make the same determination. With all the music and audio content choices available today, there is absolutely no way that anyone could conclude that they have or ever will have meaningful pricing power in the music/news/audio content category. Of course, in the specific niche of satellite radio, XM Sirius (or whatever the company will be called) will be the sole provider. But so what? In the world of media convergence, anyone who provides a legitimate alternative to a service must be taken into account. Regulators have to look beyond niche monopolies and consider the entire category that a company competes in. Hopefully regulators are keeping pace with the massive upheaval taking place across the entire media landscape and conclude that this merger should be approved.

[tags]Sirius Satellite Radio, XM Satellite Radio, Sirius XM Merger, FCC, Media Consolidation, Hypocrisy Of Big Media[/tags]