Consumer Impact from the XM Sirius Merger
We’ve been hearing about it for what seems like the beginning of the two satellite radio companies, but finally the XM Sirius merger has finally been approved. As a Sirius subscriber, this raises multiple questions as I’m a happy but confused subscriber. Will I have to buy new equipment? Will I receive XM channels? Will I have to pay more a month? Although nothing seems to be set in stone, many questions can be answered based on previous documents, letters, and statements from the two companies. To the best of our knowledge, the information below should help give you a better understanding of the merger and what it means to you.
On the offset, I first like to briefly express my personal feelings regarding the merger. Overall, based on the information that is currently available to us, I’m very happy with the options consumers are left with. Prices for current services will remain the same for at least 3 years and can even be lower if certain packages are picked. Customers can now benefit from the great programs the two offer and are no longer going to have to decide between football vs. baseball, Howard Stern vs. Bob Dylan, or even Oprah vs. Martha. I hope the move will help the newly merged company thrive and continue to offer expanding services and great prices by minimizing the constant fight of subscriber numbers. Most importantly, I won’t have to feel guilty listening to my Sirius radio as I pass the XM headquarters in Washington, DC everyday during my commute.
As the new marriage between XM and Sirius beings it’s honeymoon phase, I ask they never forget the vow they took to the consumers during this long courting process.
Common Questions and Answers Resulting from the XM Sirius Merger
- Will my current charge of $12.95 increase do to the merger?
No. The companies have said they will freeze this price for at least three years after the merger.
- Will I need to purchase a new radio?
Yes and No. If you only want the channels currently available to you, you will not have to purchase a new radio. However, if you decide you want to combine channels from the two companies, you will have to purchase a new radio.
- When will this new receiver be available?
The new receiver needed to listen to both channels from XM and Sirius should be available within three months.
- Will it cost me more to listen to Howard Stern if I am a current XM subscriber?
Probably. In post merger discussions, any “premium” programming will cost the customer more to receive in addition to their current channels. Because Howard Stern is Sirius radio, I’m sure this will be considered a premium channel.
- I really enjoy a specific channel and DJ, should I be worried they will be canceled because of duplication between the two companies?
No. Not in the meantime anyways. Both companies will continue to offer all the programs they currently do, but overtime, duplicative channels and services may slowly dwindle.
- Will I now be able to get the Sirius football stations and XM baseball stations?
Yes. However a new receiver will need to be purchased because you will be combining channels from the two companies.
- Will combining the XM football package and XM baseball package cost me more a month
Unsure. Based on the new possible packages of channels customers can choose (see newly proposed packages below) channels from both companies for cheaper than the current fee of $12.95/month, if kept under 50 channels. However, the football and baseball packages may be considered “premium” programming and come with an additional fee. We will keep you posted.
- What will the newly formed company be called?
Unsure. Although a new name has not yet been decided upon, we recommend X-Dog.
- Now that the merger is finally complete, is the stock a buying opportunity?
I wish I had the answer to this complicated question. Personally, I think now does represent a buying opportunity. Currently, the stocks are close to their 52-week lows and have been getting beaten down for months. It is likely the stock will rebound nicely during the short term. It will be worth keeping an eye on the new company as they begin their new life together. If the company does not produce as intended during the first couple years, the stock could easily be prematurely dumped because the company has become such a media favorite, any information either way could send emotional investors flying in either direction.
Proposed Pricing Packages Post Merger
|
Offering |
Number of channels |
Current monthly price |
Post merger monthly price |
|
Everything |
Approx 130 |
12.95 |
12.95 |
|
A La Carte I |
Pick Your Own 50 |
12.95 |
Starting at 6.99 |
|
A La Carte II |
Pick Your Own 100 |
25.90 |
14.99 |
|
Family Friendly |
Approx 120 |
12.95 |
11.95 |
|
Mostly Music |
Approx 65 |
12.95 |
9.99 |
|
News, Sports & Talk |
Approx 50 |
12.95 |
9.99 |
(Chart provided by http://arstechnica.com/)
The “a la carte” offerings, XM and Sirius note, will only be available to “subscribers using next-generation receivers who select channels via the Internet.”
If you have any additional information resulting from the merger or like to correct any information you feel is false, please leave comments so we can be as accurate as possible. $
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Comments
Good points…the argument against it being an antitrust issue is that Sat radio has to compete with other forms of entertainment like terrestrial radio etc. I am not sure if that legitimate but the FCC doesn’t seem to think so I guess. I have Sirius as well and own a fair amount of shares as well. Their price (SIRI) is plummeting at the moment but should recoup…I hope!
Frank brought up a good point in my office this afternoon, Will the not re-sign Howard Stern now that there is no need to get an edge over XM? They paid a pretty penny for him…
I’ve been a Sirius customer for 2 years now and LOVE the football package – however, the only reason I don’t like the merger is that it is like if Microsoft bought Yahoo AND Google. They’d own the internet. Friendly competition kept them going; granted it also was the implosion of both and the need for the merger, but still, they’ve got a huge monopoly on it. I hope the newfound power doesn’t go to their heads…