Speculation of a Satellite Radio merger is nothing new, but an increasing number of pundits are weighing in with scenarios of how the possible transaction would play out, and whether it'll benefit anyone (aside from Mel Karmazin).With only about 13 million subscribers between the two major providers, XM and Sirius, satellite radio isn't reaching nearly the amount of ear-holes that radio big-wigs thought they would be at this juncture. A lot of folks I've spoken to see the service as a high-priced stop-gap between the old technology (the FM dial) and the new one coming down the pike (wireless internet radio). In fact, satellite radio could be jumping the shark faster than satellite television did while bridging between old basic cable and services like Verizon's fiber-optic TV.
The fact that these companies are considering a merger less than a decade after both services were launched is a clear indicator that subscription-based audio content, no matter how it's delivered, will not work as long as there are free alternatives. A merger between XM and Sirius will mean more content for listeners, but at what price? Will fees go up, or will the new Frankenstein service insert ads to create what will effectively be a CD-quality radio dial with more stations?
Why were radio executives ever under the impression that people will pay for radio? Listenership on FM and AM has been in steady decline for years -- so why would people want more of the same (even at a much higher quality) and want to pay good money for it? It's a wonder that both companies still exist here in 2007.
No comments:
Post a Comment