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Sirius/XM Competition Benefits Consumers

by: Stan Muse May 08, 2008 | about stocks: SIRI    

Stan Muse

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In my last article, Sirius Opportunity in Satellite Radio, I said that:

When XM/Sirius become the only game in town, they will have better leverage than those ruthless Wal-Mart purchasing agents. I have seen a considerable amount of feedback on that, most of it complaining about monopolistic practices.

The statement was meant to compliment Wal-Mart (WMT) and show similarities. I shop at Wal-Mart, as do most Americans, and their purchasing agents are my purchasing agents. Would anyone argue that Wal-Mart has not benefited the consumer by lowering costs while offering broader selection with quality goods?

There can be no question that they have, which is why one-sixth of all goods sold come from Wal-Mart. Wal-Mart is not a monopoly, but it is a very competitive force in retail, benefiting consumers. Combining XM (XMSR) and Sirius (SIRI) will have the same effect, which is why their obsolete competitors savagely oppose the deal.

The consumer will derive the same benefits from the XM/Sirius merger: low costs, broader selection and higher quality. Consumers will still have access to all of the other content sources they have always had, if they wish. Advertisers will still be able to reach those people. But for less than the cost of a golf cart rental or airport shoe shine, many will choose satellite radio from the combined company for obvious reasons.

Terrestrial radio is damaging to your vehicle and dangerous to drivers. I have worn out the dashboard and radio buttons in my Avalanche from constantly changing stations in search of something, anything, worth listening to. This practice distracts from driving and could cause an accident. After the merger, I will replace my obsolete radio, avoiding those costs, allowing myself a broader selection and the roads will be safer. My driving experience will be much more enjoyable, especially with kids in the car. No longer will I be forced to listen to personal hygiene or male enhancement product commercials, or some high school dropout disk-jockey describing his love life.

The consumer will be the winner when the XM/Sirius merger finally gets FCC approval. New artists will be able to reach the public. Minorities will finally have a voice to express their legitimate concerns. Finally, when the dust settles, voters should remember the politicians who put their media contributors ahead of their constituency.

Disclosure: Stan Muse is LONG on Sirius.

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This article has 19 comments:

  •  
    May 08 05:56 AM
    I couldn't agree more. This is something 99.9% of the people know. The other .01% being the FCC.
    Reply
  •  
    May 08 06:49 AM
    Your article is exactly why Mr.Martin has to be investigated for intentionally stalling or killing this merger for the NAB. He is going way to far to protect terrestrial radio from competition, which everyone knows is by far a superior product. Mr. Martin is not only hurting the consumer but also our failing economy by trying to make two companies fail. Competition in any business always produces not only better products but also better pricing for the consumer. I could see Mr. Martin getting away with what he is doing if this were Russia or China, but this is the USA. What the FCC and some politicians are doing because of past donations and the fear of competition is disgusting.
    Reply
  •  
    May 08 07:26 AM
    It might be a good idea to report Mr. Martin and the entire FCC committee to the U.S. Government Accountability Office (GAO)? (OK, I know it's considered an oxymoron to use the words “US Government” and “accountability” in the same sentence.)
    Anyway, the GAO mostly deals with Fiscal or monetary decisions made by Congress and this issue may not be within the scope of their responsibility. At the very least, the GAO may be able to point us in another direction to get our concerns answered as calling and / or writing your Congress representative and FCC gets us nowhere. The GAO website is: www.gao.gov/

    Just a thought…
    Reply
  •  
    May 08 08:06 AM
    I hope the whole save your car and prevenet accidents thing was a joke. If it was then I understand the article. If you we're serious about cutting down on car crashes and saving you're car that is just ridiculous.
    Reply
  •  
    May 08 10:07 AM
    I must intensely disagree with your take on Walmart. When they first opened in my area, I frequented the store. And you are right.....items were cheap. However almost everything I purchased was made in China and the quality was NOT GOOD! As a matter of fact the quality was SH!T!.I have not shopped there for years! I do agree with your assessment on SIRI/XM. If it weren't for the sleezy Politicians taking payoffs this merger would have been done a long time ago. Our Government has become the largest prostitutes money can buy. They care nothing about we the constituates.....they care only about self-preservation. I for one am voting against every incumbant up for re-election! I say throw the crooked Bums out!
    Harv Trear
    Reply
  •  
    May 08 10:30 AM
    I am long Sirius as well, and agree with everything you wrote in your article, but to compare xm/sirius to Walmart is a bit of a stretch. First, WalMart is terrible for our economy. Just terrible. The more business they do, the WORSE our economy is. If you cant see that, then you dont understand economics. You probably went to Harvard or Yale to learn economics, the 2 worst institutions on America. They brainwash the elite and pass their bs on to them. Does Harvard have a class called Economics 101? This is where you would learn that our entire economy is a scam, and were told we can pay back principle plus interest, with just principle. This class teaches that 1st grade math you learned was wrong. 1 + 1=3. See, if 1+1=3, you can pay back the banks, and the fed with less money in circulation than needed to repay all the loans. Now I shouldnt just pick on Harvard, I know. All American State universtities and 99 percent of private ones teach bad math. Can anyone blame us for being poor in math skills?
    Reply
  •  
    May 08 11:44 AM
    Satellite radio is done.

    4G will allow for internet radio anywhere anytime.
    Reply
  •  
    May 08 01:19 PM
    jswede, Content is King, and will always be want drives any media company to profitability.

    To the rest of you that blame the whole FCC, where does that come from. The 3 repubicans are for it, and the 2 democrats that are against it. You want to blame someone, blame the two that are holding this up. The two democrats are the ones holding up the vote.
    Reply
  •  
    May 08 01:42 PM
    To fredlee,

    First of all, it's 'principal' not 'principle.' Principle refers to an 'accepted or professed rule of conduct.' Principal is 'the amount borrowed or the amount owed on a loan, separate from interest.' Apparently you didn't attend any schools that teach word usage.

    In the second place, while WMT contributes to the homogenization of choice, stomps lesser competitors by undercutting their business models, and promotes lower wage employment, the idea that the better WMT performs the worse the economy gets is ludicrous to me. WMT has broadened shopping choices for millions of lower income Americans who couldn't afford to enjoy products sold by other retailers because of price constraints.

    So before you indict WMT for tanking the economy, consider the higher standard of living enjoyed by millions of people all over the world.

    Disclosure: No position in any of these stocks.
    Reply
  •  
    May 08 01:44 PM
    163888....Have agreed with you most of the time, but I don't see how you can only blame the 2 democrats. If Martin wanted, he could have forced a vote by now and won that vote 3-2. So yes, the republicans are for it and the dems are against but they are both to blame.
    Reply
  •  
    May 08 01:47 PM
    Agree with comment:
    "To the rest of you that blame the whole FCC, where does that come from. The 3 Republicans are for it, and the 2 democrats that are against it. You want to blame someone, blame the two that are holding this up. The two democrats are the ones holding up the vote."

    This is why I will be voting straight Republican ticket....

    Reply
  •  
    May 08 01:53 PM
    To billwhateverdummy,
    I dont care if i spelled the word wrong. I know the definition of both words. My point , spelling aside , is still valid. I notice how you dont counter my real arguements. You only can come up with my spelling,and then misquote me. And i didnt say Walmart is tanking the economy, dummy, i said if walmart is doing great, our economy sucks.No one with a lot of money shops at walmart for cheap crap. Cheap crap should be there name.
    Reply
  •  
    May 08 01:54 PM
    Or better yet, every dollar spent here hurts the economy!!! Better name, more reflective of the truth.
    Reply
  •  
    May 08 02:16 PM
    mudslinger, I had thought that also until Tyler explained it. Go to Sirius Buzz Radio skip the first 25 minutes if you want (vary interesting), it is about the suit against SIRI. Then right after that, Tyler explains that the two democrats can, and are able to hold this vote up reguardless.
    Reply
  •  
    May 08 06:22 PM
    It is not important what we say or do it's not up to us. Money talks Bullshit walks that's the Answer.
    Reply
  •  
    May 09 07:28 AM
    I'm surprised that no one has mentioned the obvious. The delayed merger is a pissed off FCC for comments made againest them by Howard Stern. The FCC has had a mission for years to silence him and with little or no power over satellite radio, delaying the merger is thier only weapon. They know that his contract is limited and he retires in 3 years, the longer the delay the more they control his audience numbers.

    It's a travesty that the FCC is hurting the choices of the public for thier own personnel vendettas.
    Reply
  •  
    May 10 11:06 AM
    The buck stops at the top with repug Kevin Martin.


    On May 08 01:47 PM Old Ga. Dawg wrote:

    > Agree with comment:
    > "To the rest of you that blame the whole FCC, where does that come
    > from. The 3 Republicans are for it, and the 2 democrats that are
    > against it. You want to blame someone, blame the two that are holding
    > this up. The two democrats are the ones holding up the vote." <br/>
    >
    > This is why I will be voting straight Republican ticket....
    >
    Reply
  •  
    May 10 02:43 PM
    Merger Mania, I sure you like to bring trouble for yourself at work also for something that does not benefit you. Lets not forget that it was not long ago, that the last time the 3 republicans voted to make it easier for TV., radio, and print to intermerge against the 2 democrats. The 2 democrats went crying to the democratically controled congress that tried to cut funds from the FCC. IMO if the congress was controled by the republicans, the FCC would have already voted on this a long time ago. Lets not forget it is commissioner Adelstein that still thinks this needs to be looked at more deeply, because the DOJ did not do a good enough of a job in considering this matter. Come on it was over a year they took to make a decision.
    Reply
  •  
    May 10 03:02 PM
    You democrats out there, wonder why I get so pissed with you. well it is becuase you never make sence. A perfect example is, you want to blame the whole FCC for this debacle, you want to blame Martin who is for the merger. Instead of blaming only the 2 people that are responsible for holding this up. The only 2 that are against the merger. You make as much sence as on this, as you do when you are in favor of killing a baby (prochoice), and are against the death penalty. Dhaaa, lets kill a baby that has not done anything wrong, dhaaa, but let someone that has raped and killed 5 people live dhaaa. Makes alot of sence right.
    Reply
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