Do Not Pass Go; Do Not Collect $200.00...
Despite protests, the only two satellite radio companies in existence are merging. Like MSN's Kim Peterson, I'm a wee bit skeptical:
I don't have satellite radio, and up til now I was feeling like I was missing out. Not anymore.
The first thing I thought after seeing the news was that the price of satellite radio will go up. But the DOJ sees it differently. The merged company won't be able to raise prices, according to the DOJ, because doing so would send customers into the arms of traditional radio, HD radio, iPods and the audio content available on cell phones.
OK, I could maybe buy that. The iPod might look an awful lot better to people if their satellite radio bill increases. But the next part of the DOJ's news release is downright silly. XM and Sirius are going to save a "substantial" amount money by merging, the DOJ said, and those savings could be passed on to consumers in the form of lower prices. Uh-huh. OK. Sure.
Yet in the same paragraph, the DOJ said it wasn't possible to estimate how much money would be saved because XM and Sirius wouldn't provide enough evidence. So the DOJ all-but-announces a satellite radio price cut even though it had no financial basis to do so.
Finally, the DOJ said that future technologies will provide enough competition to satellite radio to keep prices down. Wireless networks being developed can stream Internet radio to cell phones and other devices. But it's hard to predict which of these networks will be successful or when they'll become available, the DOJ said.
At any rate, the merger got the green light (it goes to the FCC next) and we'll see if the DOJ's claims turn out to be true. I could see hardware incompatibilities causing some problems, but the DOJ doesn't mention that. Call me a cynic, but I wouldn't be surprised if satellite radio gets a little more expensive.
I don't have satellite radio, and up til now I was feeling like I was missing out. Not anymore.
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