FC NOW: The Fast Company Weblog
February 19, 2007
Merging Questions
Fast Company first wrote about the competition between XM and Sirius a couple of years ago, and while rereading the piece might not be a lesson in "I told you so," the companies' recent merger (subscription may be required) might be of interest.
For me, the merger raises several questions. One, does the merger indicate that the very idea of satellite radio has promise -- or that it might be an idea before its time? If there's truly a sizable business opportunity here, might it not be able to support more than one company? Secondly, I'm somewhat confused by broadcasters' plans to challenge the merger. Mightn't another satellite radio company be formed some day? Is a company a trust if there's still the opportunity for other businesses to enter a market?
And thirdly, what's the appeal? I personally have little interest in satellite radio. I'm not an avid radio listener, and part of me still feels like satellite radio is basically Music Choice (the cable television audio music channels) without the lame trivia questions and karaoke-quality visuals. I'm also curious whether the company's attempts to differentiate themselves content-wise is working. Is Howard Stern appeal enough to sign up for the service?
Maybe the market's too small for one company.
Posted by Heath Row at February 19, 2007 8:48 PM | Category: |
3 Comments
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Satellite radio isn't for everyone, but I think that if everyone tried it out for a while, they'd see the benefit of it. I can't live without my Inno, just like I can't live without my Blackberry or iPod. Sirius has done a great disservice to the industry by making so much of their getting ripped off by Howard Stern for over a half of billion dollars. Neither XM or Sirius is about one or two people. XM has a great approach to their marketing- find what turns you on. Whatever your music taste, political inclinations, etc., you can find great content on XM. They don't just pitch one show. They remind people they have something for everyone- Oprah, Opie & Anthony, NHL, NASCAR, MLB, PGA, Air America, Fox News, CNN, the list goes on and on.
If this merger goes through, I worry it can hurt more than help, but it depends on the approach the new company takes to getting people to tune in.
My fiance predicted the merger several months ago, when he noticed that Howard Stern spent less time "bashing" XM during his morning broadcasts. We immediately began to worry.
If there was only one carrier instead of two, would our (nominal) monthly subscription fees increase? Would they pare back on programming because they wouldn't need to woo customers from competitors? And, perhaps most disturbingly, would they begin interjecting commercials in between songs on the music channels?
I love satellite radio and spend far less time watching television or frantically downloading music into our ipods. I listen to it in the car on my way to work. I've even discovered new artists that I wouldn't have known about had I stuck to top-40 radio or my trusty ipod.
Sure - it's not for everyone (especially those who LOVE the February auto clearance bonanza commercials on terrestial radio) - but it's a great option for people who love music.
(and to answer your question, yes, Howard Stern was enough for my fiance to sign up for Sirius. But it's CoffeeHouse 30 and the New Wave channels that have gotten me hooked.)
We (my co-author and I) predicted this merger months ago. It is a basic repeat of 'wars of attrition' that have occurred before - remember British Satellite Broadcasting and Sky TV?
There's potential in satellite - particularly its ability to grab nationwide niches that are too small to be well served by regular radio but can claim a broad audience with that footprint (a 'long tail') story.