Radio Shack supports XM/Sirius merger. So what?

by Bob Williams, Hear Us Now

It's probably fair to say that Radio Shack and Circuit City are not the first names that leap to mind when it comes to gauging consumer benefits.

But supportive words from the two big electronics retailers and others are being widely touted by XM and Sirius this week as proof positive that the proposed merger of the country's only two satellite radio providers "would result in consumer benefits."

Don't get us wrong: We cherish our longstanding membership in Radio Shack's battery club and admit we have often found the open box bargains at our local Circuit City irresistible. They are both very good at what they do, which is selling their stuff.

Among the items electronic retailers are selling a lot of these days are satellite radios, all of them boldly emblazoned with either a Sirius or XM logo. The retailers make a lot of money selling and installing those radios -- and Sirius and XM subsequently collect lots of monthly fees to provide programming for those radios.

Those monthly fees have not been sufficient for either company to ever turn a profit, however, which is why they say they now need to be given special dispensation to merge into a monopoly. Many observers have pointed out that those financial woes are due to lousy business moves, such as Sirius's huge, multi-year deal with shock jock Howard Stern.

Circuit City and Radio Shack are not the only business partners whose support XM and Sirius say somehow translates into a clamor of "consumer" backing for the deal. XM and Sirius are also bragging about some auto manufacturers who have hopped on the bandwagon for the merger, including Honda, Toyota and Hyundai.

According to XM and Sirius, here is what it all means:

"These supportive companies have a keen understanding of their customers and drive sales and business by catering to the interests of consumers. Their support sends a clear message that the combined company would be welcomed by the American public."

Consumers Union, the sponsor of this blog, is one of many public interest groups which are opposed to the XM-Sirius merger.

The reasoning is really pretty simple. The deal would combine the country's only two satellite radio providers -- who now compete quite aggressively for customers -- into a government-sanctioned monopoly. Monopolies are not good for consumers. (Click here to get more information on the proposed merger from www.hearusnow.org.)

In an effort to win support for the deal in Washington, Sirius CEO Mel Karmazin has pledged to keep rates low following the merger. He has also proposed to offer tiers of programming at differing rates, instead of an all-or-nothing package. Those assurances have some Wall Street analysts predicting the deal will gain government approval, possibly by the end of the year.

We are highly skeptical of promises from XM and Sirius -- and with good reason. Both companies pledged not to merge when they were granted their licenses to begin setting up their satellite networks in 1997. That should make it pretty obvious that their promises don't mean very much.

Both the Justice Department and the Federal Communications Commission have to approve the merger for it to happen. Congress is also expected to have a say, although it is not part of the official approval process.

As for XM and Sirius, we would like to offer a little bit of advice should they be interested in finding out what consumers really think about their proposed merger: Ask some actual consumers rather than their corporate cronies.

We bet they can find a bunch of them down at their local Radio Shack or Circuit City.

article originally published at http://www.consumersunion.org/blogs/hun/2007/09/post_2.html.

Your not correct sir.

How can you be a media critic if you don't have a clue what your talking about? Well I guess somebody gave you the idea you had some real grasp of what was going on in satellite radio. Satellite radio is a entity all to itself. If you knew how it was actually created maybe I'd gave you some slack. It was created by one man Martin (Martine) Rothblatt. His vision was stolen from him by your friends at the FCC. The day he was asking for a license for Sirius, "his invention", they (the FCC) cut the product in two. Giving the rights to a second company, a company that didn't even have a clue (like yourself) how the technology worked. That company, now XM, at that time was a front company for General Motors. They went on to steal ideas that came along with this stolen technology. That being said GM sold most of their rights of XM and Delphi to an independent company. That company has run Delphi into the ground. So you see Sirius didn't promise anything. The FCC stipulated to Sirius what it was to do! That was give away years of hard work and technology for free!!!
Also your summizing that Sirius made a mistake in signing up Howard Stern to a $500,000.00 contract. That would be your silliest comment of all. Before Sirius signed Stern, to his five year contract, it was about to go into receivership and had about 500,000 listeners, mostly truckers, because it had the best signal. As of the last quarter Sirius now has close to 8,000,000 contracted listeners. That in-itself is why XM wants to merge with Sirius. I myself have both systems and would love to pick and chose my listening stations the way Mel Karmazin intends to do with the merger. More stations less money. Sounds good to me.

There is hundreds of different types of medias out there to choose from, satellite radio, TV, Computers, iPods..."WiFi" is the next step to globalizing music and entertainment. The future is here and you want it to go bankrupt before it's even emerged. If the two satellite companies become one that will not stop parody or start a monopoly. There is hundreds of other forms of entertainment and if the "New" company doesn't price it's product correctly it will become the next "Pet Rock". If this merger doesn't go through I can guarantee you both radio systems will be the next "8 track"!

In the future "WiFi" will change the way we get our entertainment. We can all thank Martine Rothblatt for his (her) invention.

Okay, Okay, but what do the CONSUMERS think?

I have been a subscriber to Sirius for almost two years now. Naturally, I believe the opinions of people like me are the ones that should matter. As far as I can see, I and EVERY OTHER CUSTOMER is thrilled about the prospects of this merger passing. This includes everyone I know and everyone I've heard of. The FCC recently asked the public for comments about what they think, and about 3 out of every 4 supported the merger. There was even a poll taken recently that showed 75% of Americans favoring the merger's approval. The only opposition comes from the lobbyists at the NAB, who despite what they tell you, want the exact opposite of what's in the consumers best interest. Why do they spend millions lobbying against the merger? Because they compete with satellite radio and want to stifle any increase in competition. Obviously, the merger would not create a "government sanctioned monopoly" (lol) if there is significant competition.

Sirius/XM MUST add new subscribers to be successful. And if the the NAB propaganda is true, they will have a harder time doing so with "increased prices" and "decreased quality". The folks at Radio Shack and Circuit City know that that won't happen. After all, they want to sell radios, correct?

The bottom line is, stop listening to lobbyists, and start listening to consumers.

The media's job is to interest the public in the public interest. -John Dewey