Merger satellite radio’s chance for survival

By Freedom Newspapers

Satellite radio has been a godsend to American music and sports fans who have felt marginalized by the relentless consolidation of the companies behind the traditional broadcast signals.

Now, inevitably, consolidation of the two largest providers may be the only way to preserve the options that industry provides.

XM, with 7.6 million subscribers, and Sirius, with 6 million, have both earned loyal followings by offering dozens of stations for $13 a month, but lost a combined $1.5 billion in 2005, in part due to the desperate bidding wars for shock jock Howard Stern, major-league sports leagues and auto makers.

In the meantime, subscriber growth has been slowing among a pool of consumers that for the most part is used to paying for TV service, but is still hoping not to have to go there with radio. Many in the iPod generation may have little use for traditional radio where they don’t have 100 percent control of the playlist, and HD radio is just emerging onto the market.

But satellite radio still has much to offer to consumers who appreciate a broad cross-section of music, but don’t want to put in more time in front of a computer in order to accomplish that.

The Federal Communications Commission specifically barred a merger between the owners of the two satellite radio licenses it awarded back in 1997. So the prospect of getting the deal a green light are even dicier than normal.

The process began earlier this month with a hearing in front of a brand-new congressional antitrust subcommittee, which purports to be able to determine whether satellite radio competes directly with other technologies, and whether consumer choice and pricing will be enhanced or diminished by the merger — answers the market is generally supposed to shake out.

And the monopoly that an XM-Sirius merger would create would not allow manipulation of a dominant medium by one huge conglomerate — it would help a niche technology where the offerings are already fragmented into more than 100 stations to survive in an increasingly unstable market.

So we hope the FCC, Congress and the rest of the federal government can find their way to keep their hands off and give satellite radio a chance to thrive into the 21st century.