XM / Sirius Merger Making a Lot of Noise
XM Satellite Radio (Nasdaq: XMSR) and SIRIUS Satellite Radio (Nasdaq: SIRI) announced today
that they have entered into a definitive merger agreement. Under the terms of the agreement, XM and SIRIUS shareholders will each own approximately 50 percent
of the combined company.
Stepping back, this means that the merger will result in a single satellite radio provider with more than 12 million total subscribers. This will also bring together the best of both worlds: Howard Stern, Opera Winkrey, Major League Baseball and Nascar. (Amongst some other great programming).
Satellite radio haters will often cite that ubiquitous wireless or mobile Internet connectivity will render satellite connection pointless. I agree, but I still think that XM and Sirius could have a long future in radio.
Why?
The new XM/Sirius needs to look at itself long and hard in the mirror and realize what they do best. Is it providing radio over satellite? I don't think so: that is only their delivery method.
I think XM/Sirius's hedgehog concept is this: Quality programming of audio media, and licensing. Through a continued investment in a service similar to XM Radio Online, XM/Sirius can continue to sell quality music and programming regardless of distribution channel. XM Radio Online allows XM radio subscribers to listen ro satellite programming via the Internet. As mobile connection speeds increase, paying subscribers could soon be listening to their XM/Sirius radios via their cellphones, crackberries and PDAs.
Apparently the merger will take many a month to get through the regulatory boards. Let's hope it gets through: The world could use more quality programming, and one less company pissing away millions of dollars.
