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After the XM/Sirius DOJ Approval

Now that the DOJ has approved the Sirius/XM merger, it’s likely the FCC will follow suit with a minimum number of conditions or “strings.”

Consider this deal done.

It reinforces my faith in the power structure that DOJ can look at the details of a deal like this and actually understand them, without being swayed by rank self-interest and propaganda.

Here’s the official DOJ statement, courtesy of Orbitcast:

After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers….

As an aside, here’s Orbitcast’s helpful depiction of your tax dollars at work:


As I have often said, the consequences of this deal for the radio industry are marginal at worst.

After all, Sirius and XM – together or separate – are impacted by the same factors impacting the rest of radio. And they are even less capable and ready than the rest of us are to meet those challenges.

Here are just a few reasons why:

The lack of interactivity and customization – to say nothing of the lack of localism – will do a merged XM/Sirius no favors. These are inherent to the existing technology. Of course, look for the technology to evolve in their favor – and the more it evolves the less it will concern audio and the more it will involve video.

The stubborn resistance of Sirius management (which clearly will be in the driver’s seat) to spread some form of their content (and I mean their premium content) across all available channels for free to the consumers who like their current radio options just fine says little for the post-deal vision of satellite radio leadership. If you’re in the business of creating great content, you maximize your revenue by licensing it. Just ask Sony Pictures.

Finally, the chance that satellite radio “consolidation” will compromise the current media experience of those who already subscribe to either Sirius or XM is a very real possibility, all rate issues aside. The problem with subscriber-driven services is that you are tempted to become beholden to even the tiny factions within your subscriber base. Just ask the average Public Radio station. But in a subscriber-based world, every tiny faction counts.

All in all, satellite radio will be its own best friend or its own worst enemy. Their fate will have little bearing on the fate of the much larger radio industry in the long run.

And the latter, my friends, is in your hands and mine.

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