The New Yorker has an interesting piece in their financial page on the planned merger of satellite radio firms XM and Sirius by James Surowiecki. From a consumer perspective, Surowiecki argues that in this case a monopoly might be good for us:
It comes down to the question of what market XM and Sirius are in. If
it’s just satellite radio, then they are competing only with each other
and the deal would be sure to send prices soaring. But it makes more
sense to see XM and Sirius as part of the bigger radio and digital
audio markets and thus in competition with AM/FM, HD, and Internet
radio. In that case, even a merged company would have only a small
percentage of radio listeners, and competition would limit its ability
to raise prices.
Beyond the competitive pressure on satellite radio to keep its prices low, he argues that radio diversity in general benefits from the merger. He cites a study by Future of Music from last year that found that four companies had nearly fifty percent of all listeners of broadcast radio, programming largely the same bland pop and country music around the nation. A stronger satellite radio company with over 300 channels of diverse content would be in a better position to pressure the big four and others to liven up their offerings if they wish to remain viable.
It’s unclear from the discussions I’ve read among media activists on what the public interest obligations are if there is one satellite radio provider in the US. XM/Sirius will already carry NPR content, but will not carry any local news or public affairs programming. Consumers Union and Consumers Federation of America have already rejected the proposed merger as being bad for consumers. This will be an interesting FCC proceeding, to be sure.
5 thoughts on “XM+Sirius: The monopoly you can feel good about?”
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