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Article

Title: XM & Sirius: What a Merger Won't Fix

Author: Lowry, Tom; Lehman, Paula Article Type: Product Analysis
Source: Business Week, n4024 p31(1) Publication Date: Mar 5, 2007
  ISSN: 0007-7135
URL of Publication: http://www.businessweek.com

XM Satellite Radio and Sirius want to merge, and they have cited advantages to consumers, but theres no guarantee the six-year-old business model will survive. XM Satellite Radio and Sirius could be able to save costs as a single company, but neither has earned one cent of profit, and their combined losses for 2006 are expected to reach $1.7 billion. Competition has emerged everywhere, with car salespeople pushing new iPod jacks. More than 57 million Americans now listen to web radio each week, according to Bridge Ratings, as compared with 14 million subscribers for XM and Sirius combined. Broadcasters are starting to offer high-definition or HD radio as well. Consumers have to purchase a special receiver to obtain HD, which crowds more programming into the same frequency, but the HD service is free. Another 240 million people listen to regular radio at least once weekly, and a new radio based on WiMax might be capable of streaming web radio to a speeding car. Paul Maloney, editor of RAIN: Radio and Internet Newsletter, says satellites are costly and will in time be obsolete for delivery. The eclectic programming provided by XM Satellite Radio and Sirius could be very successfully delivered on cellphones or websites. If the companies distributed more programming through third parties, the present monthly subscription model could benefit revenue-wise from ad revenues or subscription fees with wireless carriers or websites.

Companies:
SIRIUS Satellite Radio TecTerms
XM Satellite Radio Inc

Products:
HD Radio Satellite Radio

TecTerms:


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