By Frank Ahrens
Washington Post Staff Writer
Saturday, July 26, 2008
The merger of XM and Sirius satellite radio companies raises a number of questions for subscribers of the two services and for Washington, which has been the home of XM for more than a decade.
XM has 9.7 million subscribers; Sirius has 8.6 million. Ever since merger plans were announced in March 2007, subscribers have wondered what would happen to their service if the two companies combined.
Each service has unique programming: XM has Major League Baseball games, Sirius has NFL games. XM has Bob Dylan, Sirius has Howard Stern. Some subscribers have been hopeful that a merger would enable them to get the best of both services.
Others wonder if a merger means they will lose their favorite channels and if they'll have to buy new radios.
In a June 13 letter to the FCC, Sirius and XM said the combined company would voluntarily create a number of new programming options for subscribers. Neither company would comment further. The answers to these questions come largely from public filings and past statements from the companies.
Q It costs $12.95 per month to subscribe to XM or Sirius. Will the price go up?
A The companies have said that they would freeze the $12.95-per-month rate for three years after the merger. In the letter to the FCC, XM and Sirius said they will create a number of programming options ranging from $6.99 to $16.99 per month.
· For $6.99 per month, subscribers can choose either 50 Sirius or 50 XM channels and add additional channels for 25 cents each per month.
· For $14.99 per month, subscribers get 100 channels: XM subscribers get mostly XM channels and can pick Sirius channels to round out to 100. A similar deal will be available for Sirius subscribers.
· For $16.99 per month, XM subscribers get all of their current XM channels and can add an undetermined number of Sirius channels. Vice-versa for Sirius subscribers.
· For $9.99 per month, subscribers can get a "mostly music" or "mostly news, sports and talk" package of channels.
· For $11.95 per month, subscribers can get a "family-friendly" package of existing channels from either XM or Sirius, which would block out such programming as Howard Stern and rap and rock channels with profanity-laced songs. For $14.99 per month, subscribers can get a "family friendly" package of channels from both services.
As an XM subscriber, will I get Howard Stern?
Yes, but you'll probably have to pay extra. In the letter to the FCC, the companies said that such "premium" programming will cost more. Stern is not identified in the letter, but he is Sirius's biggest draw.
Let's say I want more channels than are available in a family-friendly package but I don't want my children to hear Stern. What then?
Both companies have channel-blocking ability.
If I already have one of the services, will I have to buy a new radio?
If you want one of the a-la-carte packages, yes, you'll have to buy a new radio. The radios will be on the market within three months of the close of the merger, the FCC letter says.
So my existing satellite radio can hold all of these new channels? I won't lose a bunch of channels I like?
Both companies say that they continue to compress the bandwidth of their channels to squeeze more into their spectrum. Though both services will continue to drop and add channels, they do not anticipate wholesale dumping of channels post-merger.
Both services depend on a series of "terrestrial repeaters," or devices that boost the satellite signal in urban areas. But some of them cause interference and the FCC has ordered XM to shut down 50 of their repeaters and fix 50 more. Will this hurt my reception? Will the Sirius signal be dependent on XM repeaters?
Sirius service will not depend on XM repeaters; the two systems do not talk to each other.
But if that's the case, how can I add Sirius channels to my XM service and vice-versa?
Let's say you have XM and want to add Sirius's NFL package. XM will simply take Sirius's NFL game feeds and beam them to your radio on XM's spectrum. The XM and Sirius systems don't need to talk to each other for this function.
Sirius is headquartered in New York and XM is here in Washington. What will happen to the XM headquarters at New York and Florida avenues?
XM expects to continue operating out of its headquarters, which it owns.
What will happen to XM employees? Will there be layoffs?
Possibly. All mergers seek to create efficiencies by combining duplicative jobs. However, in their filings, the companies say they anticipate headcount reduction through attrition and the elimination of "overlapping" functions.
What will the merged company be called?
No new name has been proposed. Both XM and Sirius have built up substantial brand equity with their subscribers, who tend to think of themselves as "XM people" or "Sirius people."
Former XM chief executive Hugh Panero built a chair in XM's command center modeled after Captain Kirk's on the starship Enterprise. It's where he sat and pushed the button that switched on XM in September 2001. What will happen to the chair?
XM has no plans to change its facility.
View all comments that have been posted about this article.