So the New York Post's report is true: The Coke and Pepsi of satellite radio, XM and Sirius, have announced that they're merging. As you'd expect, the official press release says that this is fantastic news for customers--with benefits ranging from better programming to cheaper and better devices. (It also reports that the $13 billon deal is a "merger of equals," with XM's Gary Parsons serving as chairman of the combined company and Sirius's Mel Karmazin serving as CEO.)
My impulse, however--thinking here as the reasonably happy XM subscriber that I am--is to be bummed out at this news. Change is always tough. And until I'm convinced that the change is for the better for those of us who are already satellite radio fans--and who chose XM over Sirius, or vice versa--I'm going to be a tad paranoid.
The release says that the combined company will offer broader programming. And I'm guessing that the big marquee names of both services would survive. XMSirius (or whatever it ends up being called--I'm guessing that the XM name would eventually prevail, but I could be wrong) would presumably keep both XM's Major League Baseball (a huge plus for me) and Sirius's Howard Stern (which I'm living happily without, but your mileage may vary).
But there'd have to be some downsizing of programming, given the massive overlap between the two services. A combined company isn't going to preserve two 1960s pop stations. It's probably not going to keep both XM Public Radio (a homegrown channel with NPR castoff Bob Edwards) and Sirius's NPR channels. Worthy niche channels--like XM's old-time radio station--might or might not make the cut.
In other words, I fear major cutbacks--maybe in part because I'm still ticked off that XM stopped carrying an audio feed for MSNBC a few months back.
With both companies pouring millions into ambitious programming, the competition between 'em has been swell for anyone who's a customer of either service. I fret that XMSirius, which would have a monopoly on satellite radio, would get fat and lazy--in part because even a less ambitious unified satellite service would be so much better than most terrestrial radio.
One interesting tidbit in the release: It speaks of the merged outfit "offering consumers the ability to pick and choose the channels and content they want on a more a la carte basis." What that means isn't entirely clear. But if it involves being able to opt out of paying for the several dozen stations I'm never going to listen to, it could be intriguing. (Wild guess, though: A customer who only listens to 20% of the new company's stations isn't going to save 80% of his or her current monthly subscription fee.)
Then there's the hardware question. Will all existing XM and Sirius devices--including all those receivers built into cars--work forever? If there's some period during which the services aren't completely merged, will new devices have to support both flavors of satellite radio? Is the combined company going to keep all of XM and Sirius's pricey satellites? I don't know enough about the technicalities of satellite communications to even hazard guesses here.
(XM, by the way, has usually been ahead of Sirius when it comes to the coolest hardware--so much so that I'm not worrying that a merger will be bad for the quality of satellite radio gadgets. I'm just assuming that future devices will draw more from the XM side of things than the Sirius one.)
It's possible to be an optimist here. Not having to choose between two sets of programming could have its upsides. (If you're a baseball fan who also likes Howard Stern, you've had to make a tough choice until now.) And both companies have had somewhat shaky business models until now; one financially healthy provider might be a better scenario for consumers than two that are bleeding cash. (The story is that a merger would save the combined company $7 billion a year.)
Here's the biggest reason I'm not completely panicky, though: In the long run, both XM and Sirius's biggest competition isn't each other. It's iPods and YouTube and TiVo and HD radio and MySpace and HDTV and Wii and PSP, basically, anything you might do to entertain yourself rather than listening to satellite radio. Which means that even a unified service would have plenty of incentive to offer folks lots and lots of reasons to sign up and keep paying that monthly service fee.
Assuming that the merger doesn't face any insurmountable legislative hurdles, we'll see how this all sorts out. One of my coworkers, upon hearing the rumors of a merger of satellite giants, cleverly said that it could turn out to be "a marriage made in heaven." Let's hope so....
