Department of Justice is Accurate in the Ruling of Sirius/XM Merger - No Problem

Implications: The merger of Sirius and XM satellite radio providers will not be a competitive threat to terrestrial radio or HD radio. Other competitive alternatives for the listeners ear will mean more entertainment choices in the future for those seeking audio entertainment. Sirius and XM need to fully market and develop satellite video as an alternative in mobile broadband development of video receiving capabilities.

Analysis: From an automotive OEM perspective, the Department of Justice ruling to allow the merger of Sirius and XM does make sense. The automotive OEM's, when it comes to entertainment, want to provide what the customer wants. And if they want multiple modes of audio entertainment, so be it. Most OEM's can testify to the experience that consumers are adding satellite radio to their vehicles as a compliment to terrestrial and HD radio, and to MP3/iPod AUX interface. It isn't so much a competition as it is a compliment, much the same way as the television netowrk and local broadcasting have been complimented by cable television. In some premium vehicles, you can find consumers selecting both HD and satellite, in addition to the base terrestrial radio receiver that is standard equipment. Also, as mobile broadband is extended to the car, the internet connectivity of the future vehicle will mean even more audio options for the end consumer. So satellite radio will be one of many options available in future vehicles.
And some of these future audio options could pose a risk to satllite radio fee structures, forcing more acceptance of advertising and corporate sponsoring to control subscription costs. But it is apparent, that the younger generations that have been exposed for much of their lives to subscription access cable and subscription internet, are more accepting of the subscription structure of satellite radio. The area of entertainment where Sirius and XM could perhaps have success even equal to satellite radio, is in the supply of satellite video in an on-demand and/or subscription model. Video capability will be more common place in the vehicle of the future, providing television and on demand movie access to those consumers choosing this content for their vehicles. And this market will also experience competition from the straming video content of the future mobile internet connectivity of the vehicle of the not too distant future.  The automotive OEM's intend to offer the total infotainment content that the future wired generations will demand. This connectivity will not only be in place for entertainment, but also for information, vehicle dynamics, and vehicle/occupant safety. Sirius and XM have the potential to be one of many providers of entertainment and information for this burgeoning growth of infotainment not only in the U.S. but for the rest of the world as well.