News for 'SIRI' - (EDITORIAL: Merge satellite radio: There's too little
need for two systems)
Feb 26, 2007 (Newsday - McClatchy-Tribune Business News via COMTEX) --
The
onlytwosatellite radio systems in America, Sirius and XM, want to
merge. A
decade-old federal rule bars it. But neither has shown a profit, so
Washingtonshouldlet them combine. With all the other sources of
entertainment and
information, there just isn't enough of a market for two.Sirius
Satellite Radio and XM Satellite Radio went on the air in 2001,
largelytoprovide motorists a radio signal that would persist wherever
they happened
todrive;many new cars come with a radio for one or the other (not
both). Their
federal broadcast licenses require that there be competing services, to
ensureconsumersa choice and to restrain prices.
Although their subscribers and revenues have increased over the years,
neitherevermade a cent. So now they have proposed an $11.4-billion
merger, combining
programming and cutting operating costs while initially broadcasting on
bothradiobands. Under federal rules, the two can merge only if
consumers benefit.
The single service might indeed offer a wider range of programming, but
withoutdirectcompetition, the monthly $12.95 fee would surely rise.
But satellite radio faces competition from newer technologies:
high-definitionradio,music over cell phones and the Internet. Many cars
come equipped to play
iPods through their speaker systems. Besides, after enough losses, one
of
thetwomay well give up anyway -- leaving millions of subscribers with
useless
radios. Better to let them merge now.Copyright(c) 2007, Newsday,
Melville, N.Y.
-0-SUBJECT CODE: ND
Source: Comtex Wall Street News |
