Re: [Swprograms] Sirius / XM Combo -- effect on listeners -- article in WSJ

[Joseph Buch <joseph.buch@xxxxxxx>]

At 03:50 PM 02/21/2007, Richard Cuff did not write but forwarded:

>"The merger "is not going to help their subscribership," says Jimmy
>Schaeffler, senior analyst at consultancy the Carmel Group. "They
>should be doing whatever they can to clarify consumer confusion." He
>says the companies should consider promising a free upgraded
>dual-format radio to anyone who joins either service this year,
>subject to merger approval."

I am not a current subscriber to either Sirius or XM although I have been tempted on several occasions until the recent premption of WRN and dropping of CSPAN.  The merger simply firms my decision to not subscribe to either service until the dust settles.

Mel Karmizan has stated that the omission of duplication of programming will free more channels for new services.  That is the good news assuming he restores things like CSPAN Radio and WRN full time.

The bad news is that both companies will likely plateau in their subscriber base as people like me delay any decision.  The regulatory hurdles and the absence of a design of a dual format receiver tell me that it will be years before this thing is settled.  

Meanwhile both companies will have to continue to operate with their noses barely above the cash flow water line.  With declining new subscribers as guys like me decide to do nothing, there is little hope they will achieve positive cash flow any time in the near future.  Will they exhaust their cash before they can pull this off?

The receivers are an even more serious problem.  Not only do the two systems use different coding technology, they also use different RF frequencies.  The two companies signed an agreement years ago to make the second generation of receivers compatible with each other.  That has not happened probably due to lack of a driving force but also possibly due to the complexity and patent issues involved with such an approach.  With the Sirius chip set being a power hog compared to the XM design, it is hard to imagine how anyone will successfully design a receiver that takes both formats without power demands that will eliminate battery powered portable receivers.

I think the relatively unexciting response by Wall Street to the news is testimony that a lot of others have similar reservations to mine.

Meanwhile there is now a DSL provider (DSL Extreme) advertising a $12.95 per month introductory rate for several months.  With the possibility that a receiver compatible with both formats will be unable to be used while walking around, the DSL option with 5000 program sources and a C. Crane Wi-Fi Radio are starting to look like my best option. At least I can listen to thousands of distant stations on the patio.

Joe Buch


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