Saturday, August 9, 2008

Sirius XM: Tune in next year

What was Mel Karmazin thinking? Strategically speaking, they have been talking merger for more than a year. Six months ago, they got approvals from the Justice Department to merge. AND it took SIX months for the FCC to approve the final merger. So in ALL that TIME, Sirius hasn't been PREPARING for what seemed like an INEVITABLE future. Frankly speaking, they are missing the boat. To take another six months to release a new radio designed to receive both Sirius and XM transmissions is outrageous. Mel should be jumping up and down!

"This is a bit of a shocker even to analysts who follow the industry. The companies did promise that the merger wouldn't mean subscribers needed new radios. But some analysts expected broader programming changes and dual-mode radios to be available soon after the merger closed."

In six months, a new version of the iPod could be released. In six months, new phones and radios capable of receiving internet radio signals will be released, in six months, this merger could be the beginning of the end. I call this delay a true missed opportunity and one that they strategically should have been ahead of. Unless they have up their sleeve another method to provide current customers of each device all available content, they are in trouble. "Developing a new radio would have required manufacturers to make a big gamble on the merger's approval. Still, a nine month delay before a full fledged interoperable radio goes on sale could seem like a long time...Oddly, long before the merger, the Federal Communications Commission mandated that the two companies develop an interoperable radio. And in 2000, the companies said they put together a team to develop a dual mode radio. Progress on that front has been somewhat limited as the companies and the FCC spent years squabbling over the interpretation of the rule."