I never thought I’d see the day satellite radio rivals XM and Sirius agreed to merge as one. From a business perspective, the proposed merger makes a lot of sense. Double your subscription base and eliminate the need for half your satellites while slashing redundant stations – it’s a recipe for success and will undoubtedly save the company a lot of dough.
But what will it mean for the consumer – particularly the Canadian consumer? For starters, there are issues regarding hardware. I have an XM receiver, and it was built specifically for XM service. There is no compatibility between XM and Sirius radios and that’s the way these systems were designed. Will customers have to buy a new, generic receiver to access the new revised XM/Sirius service? There’ll be a lot of unhappy customers if this is the case – not the least of which are the OEMs who have existing deals with one provider or the other.
Then there’s the issue of Canadian content. The CRTC requires both XM Canada and Sirius Canada to broadcast a certain amount of Canadian content. But these two Canadian entities are not part of the proposed merger. Will Canadian customers have their own service? It seems unlikely a XM/Sirius super-satellite service in the US would comply with CanCon requirements.
Finally, how will this deal affect pricing? With no competition in the marketplace, it’s difficult to imagine pricing will decrease or stay the same. I’m only speculating, but I foresee a tiered pricing system much like you have with cable television, where you pay the base rate and then customize your package by purchasing other channels individually or as packages.
There’s still a whole lot to be worked out logistically before this deal gets done, but as a customer (like many of you, who spend so much time on the road) I do have my concerns. I’ve become dependent on satellite radio to get me through the daily commute and I hope when all is said and done, consumers like us don’t get screwed over.
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