Sirius and XM Merger
There are rumblings about satellite radio companies, XM and Sirius, merging. While the rumors don't seem to carry much weight behind them, I thought I should still weigh in with some thoughts on why this is and is not a good idea.
The good.
The super company would compete not against another satellite radio company, but against other forms of radio. That spells profit, something that has eluded XM and Sirius to date.
Increased customer satisfaction because all major sports networks are available on one satellite radio network.
Profit means the company is sticking around for a long time. While it doesn't look like either company is going to disappear anytime soon, how long can they go without turning a profit?
The bad.
The super company would be presumably much slower to change and adopt to changes in the overall market (i.e. podcasting), something they have been slow to do so far.
People would probably lose their jobs (although maybe this is needed for satellite radio to be profitable?)
They could jack up the rates (I see this as overall unlikely).
Most importantly, this change, while streamlining long-term consumer options, would most likely bring havoc upon existing customers. Customer service you can be assured would go down the drain. The super company would have to choose which network to ultimately stick with, which means millions of subscribers are going to have to replace their devices before their usable lifetime ends.
Summary
There is no skating around the last issue. A lot of customers are going to suffer at some point if there is a merger. New customers will benefit from a united programming effort, but existing customers are in for a bumpy ride.
The good.
The super company would compete not against another satellite radio company, but against other forms of radio. That spells profit, something that has eluded XM and Sirius to date.
Increased customer satisfaction because all major sports networks are available on one satellite radio network.
Profit means the company is sticking around for a long time. While it doesn't look like either company is going to disappear anytime soon, how long can they go without turning a profit?
The bad.
The super company would be presumably much slower to change and adopt to changes in the overall market (i.e. podcasting), something they have been slow to do so far.
People would probably lose their jobs (although maybe this is needed for satellite radio to be profitable?)
They could jack up the rates (I see this as overall unlikely).
Most importantly, this change, while streamlining long-term consumer options, would most likely bring havoc upon existing customers. Customer service you can be assured would go down the drain. The super company would have to choose which network to ultimately stick with, which means millions of subscribers are going to have to replace their devices before their usable lifetime ends.
Summary
There is no skating around the last issue. A lot of customers are going to suffer at some point if there is a merger. New customers will benefit from a united programming effort, but existing customers are in for a bumpy ride.
1 Comments:
At January 10, 2007 12:32 PM , headb@msoe.edu said...
An even more interesting merger/acquisition to think about is the rumored (and probably going to happen) deal between eBay and stub-hub, a website that sells tickets to professional games and events. The rumored $300 million acquisition by eBay of stub-hub could cause some interesting results, such as will professional teams accept tickets bought on eBay due to the possibility of online counterfeits? Many sports teams already have made disclaimers saying they don't accept stub-hub tickets, this could play a huge role in how the popularity of this concept could pan out.
Just something to think about...
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