Saturday, December 02, 2006

Ever consider marrying your sister?...didn’t think so.

In the past week it has been rumored that Sirius CEO Mel Karmazin has leaked certain hints of a possible XM/Sirius merger. Right now, these two companies dominate the satellite world and are very successful as competitors. However, if they were to combine forces it would create a complete monopoly over the industry. As I see it, like brother and sister, there would be no way these two could get along and play nice.

At this point, not much good can come from a satellite radio merger. As seen in the past when moguls join, it’s like two single people moving into a house together; everything goes into the same pot and most assets are assimilated into one collection. Unique corporate identity is lost, and the result is less-than-satisfied customers. In the case of XM and Sirius, the unique programming of each provider will be severely compromised if a merger of this magnitude were to occur. It could detrimentally “wipe out the sounds that enticed some people to subscribe in the first place” as the New York Daily News puts it.

XM claims that the merger is just a rumor, and Sirius claims that it is just “one of those ideas you kick around.” The possible merger question came about as a result of both XM and Sirius losing significant stock value recently, and having increasingly pessimistic holiday sales predictions. If both companies do join, I can’t see them gaining any monumental benefits, but I do see them sacrificing valuable quality.

This also presents the question of, why does everything have to be under the same company anyway? Monopolies are detrimental to a capitalistic society like the United States, decreasing competition and giving consumers no other choice. The merge would indeed decrease operating costs for each company, but the fact remains that a merger between XM and Sirius is a horrible idea on many fronts. That’s why I think it’s safe to assume that this fantastic idea is indeed a rumor, and should remain just that.


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