SoundTempest

The United States Justice Department has recently approved the pending multi-billion dollar merger of satellite radio competitors XM and Sirius. Though no other satellite radio providers exist, officials from the DOJ stated that the merger would not constitute a monopoly, since there are other alternatives to satellite radio itself; consumers can select options such as digital recordings, internet radio, and high-definition radio.

This is not the final roadblock to the merger, which was proposed in February 2007. The FCC, which typically follows the opinion of the Department of Justice, must give its seal of approval for the deal to be finalized.

There has been some opposition to the DOJ’s decision, such as from Senator Herb Kohl, chairman of the Judiciary Committee’s subcommittee on antitrust and consumer rights. Khol has accused the Justice Department of “failing to oppose numerous mergers, which reduced competition in key industries [in recent years]” and has encouraged the FCC to block the merger.

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I was actually quite pleased when I heard this decision. I have yet to hear any decent arguments for why XM and Sirius should not be allowed to merge; sure, they might be the only satellite radio providers in existence, but most detractors of the deal seem to forget how small satellite radio is.

Wikipedia (for what it’s worth) claims that the merger will result in a service with 17.3 million subscribers. OK, not bad… but the vast majority of people in the United States listen to terrestrial radio. We’re talking well over 150 million people, and terrestrial radio still has a significant impact on record buying, to boot.

This isn’t even considering internet radio, which, thanks to sites like Pandora and Last.fm, is even more convenient than satellite for honing in on the kind of content you want. Plus, as the Justice Dept pointed out, there’s always the acquisition of the actual recorded media for yourself. No matter how appealing various kinds of radio are, people still like to possess music, be it physically or digitally.

As far as I’m aware, XM and Sirius have been hemorrhaging money recently, and I for one hate to see companies suffer because of frivolous competition that could hurt the consumer, too. Competition is great for some things, but since satellite isn’t anywhere close to dominant in terms of radio market share as a whole, it makes since for the only two companies that are doing it to consolidate and focus their efforts on making it better.

It might result in some layoffs and condensed programming at first, but I predict that when and if the merger goes through, within a few years we’ll see the state of satellite radio much improved.