Just saw this article on Yahoo.com from the Associated Press. I’m not sure how accurate this is but thought it was worth posting.

Satellite Radio’s Promise of ‘A La Carte’ Channel Choices Will Take Awhile to Reach Consumers

Sirius Satellite Radio and XM Satellite Radio Holdings Inc. are pegging
regulatory approval of their merger to giving consumers more control
over the specific channels they buy.

There’s one catch: Customers would need new radios at up to $200 a pop.

The companies’ combined 17 million subscribers have radios that
aren’t interoperable. Radios that can receive signals from both
companies likely wouldn’t be available for up to a year after the
merger — and another year or two later for customers who get satellite
radios via new car purchases.

The Justice Department on Monday
green-lighted Sirius’ acquisition of XM and the companies are pitching
the benefits of “a la carte” programming to the Federal Communications
Commission, which must also sign off on the deal.

The companies would offer “the first-ever a la carte options in subscription media,” they said in a statement late Monday.

XM
and Sirius obtain most customers through auto makers, who offer the
radios and the service in new cars. But carmakers require lead times of
several years to update dashboards with new products so cars with
interoperable radios likely wouldn’t be on dealer lots for up to three
years, predicts Jim Goss, a media analyst at Barrington Research.

Thomas
Barnett, assistant attorney general heading the Justice Department’s
antitrust division, said Wednesday that agency officials concluded
interoperable radios would take two to three years to be available from
automakers.

FCC Chairman Kevin Martin has expressed support for
requiring cable companies to provide “a la carte” options and may want
to set a media precedent by conditioning approval of the XM-Sirius deal
on offering customers the right to choose which channels they receive,
analysts said.

Still, the FCC is likely to approve the
transaction because the agency has “never to our knowledge” gone
against Justice, says Kit Spring, an analyst at Stifel Nicolaus.

After
Justice cleared the deal this week, both companies said “no existing
radio will be made obsolete by the merger.” Subscribers would be able
to receive select programming from the provider they don’t currently
subscribe to on existing radios, the companies said.

They haven’t
specified whether popular programming, such as Sirius’ Howard Stern or
XM’s major league baseball, would be part of the “select programming”
available.

XM and Sirius say they plan to offer eight options
that combine the companies’ offerings, such as a “mostly music” package
with 65 channels, for $9.99 a month — less than the current flat rate
of $12.95. Six of those eight options will be available on existing
radios within six months of the deal’s approval, the companies say.

The two “a la carte” packages that promise the most flexibility, however, will require new radios.

The
cheapest “a la carte” option would offer 50 channels for $6.99 a month
with additional channels costing 25 cents each, though premium choices,
such as the NFL channel, would cost $3 or $6 each per month. Another “a
la carte” plan would offer 100 channels for $14.99 a month.

Analysts expect few current subscribers to pay for the new receivers. Current satellite radios cost between $40 and $200.

Perhaps
5 percent to 10 percent of current subscribers “might go through the
trouble” of buying new radios for the “a la carte” option, Stifel
Nicolaus’ Spring wrote in a recent note to clients.

Spokesmen for Sirius and XM declined to comment beyond their statement because merger approval is still pending before the FCC.

When
the two companies debuted a decade ago, the FCC approved their launch
with a requirement that they design interoperable radios, which the
companies say they have done. But until now there was little incentive
to invest in making the design commercially available.

[Via: Yahoo Biz]

Technorati Tags: sirius xm news, sirius xm merger news, sirius xm radios

Rate this topic:

(No Ratings Yet)

 Loading ...