Satellite Synergy

By Howard Kurtz
Washington Post Staff Writer
Wednesday, February 21, 2007; 10:24 AM

In all the very fine stories about the proposed XM-Sirius merger, there was one glaring omission.

The reason these two companies have 13 million subscribers willing to cough up $12.95 a month for something we all grew up thinking should be free is that commercial radio has self-destructed.

All these folks (including me) are paying for satellite because they're tired of cookie-cutter radio formats stuffed to the gills with commercials. They're also fed up with focus-grouped music stations that play the same 60 songs until you start hearing the chords in your sleep.

And local radio stations covering news? There are a few across the country. For the rest, forget about it.

Really, can you think of an industry (okay, maybe American automakers) that has frittered away such huge advantages and sent its customers scrambling for alternatives? I know 13 million isn't huge, but buying a radio and getting it installed is a hassle; if you could pre-order it in cars, which is the wave of the future with GM and other manufacturers, a lot more people would take the plunge.

In short, I think the appeal of satellite radio transcends Howard Stern, Oprah Winfrey, and baseball and football games. It's filling a void created by the utter sameness and existential lousiness of commercial radio. Just as the timidity of broadcast television gave rise to cable, the same thing is happening on the radio side.

Interesting to read that XM and Sirius decided to move now because they think Bush regulators are more likely to approve the combination than in a Democratic administration.

On the surface, it seems that a corporate marriage of the only two outfits doing this kind of radio would be anticompetitive. But the companies have lost a combined $6 billion, and the argument is that they're not so much competing against each other as against the world of iPods and Internet downloads.

I just wish they had more competition from terrestrial radio (with the obvious exception of exciting new ventures like Washington Post Radio).

Former Boston Phoenix media critic Dan Kennedy sees a VHS/Sony Betamax problem:

"There's one aspect to this that bugs me. The reason that an XM-Sirius merger sounds at least mildly attractive is that the two services are technologically incompatible. If you want to listen to Howard Stern on Sirius and Bob Dylan on XM, you don't just have to pay two bills a month -- you also need two separate radios. That's ridiculous, and I'm sure it explains why there are still only 14 million satellite radio subscribers. . . .

"If XM and Sirius had to go head to head using the same technology, rather than existing in their own separate universes, consumers might benefit even as the two services save costs. That ought to be the direction in which the FCC encourages them to move."

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