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August 7, 2008

Sirius-XM Demise?

Analysis of: Satellite Radio: Dead Companies Walking | www.lightreading.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Alan Albarran, Professor and DirectorAlan Albarran
Professor and Director, UNIVERSITY OF NORTH TEXAS
Implications: Article suggests there is limited if any future for satellite radio.  The FCC's decision to let the companies merge suggests otherwise.

Analysis: At the heart of this article is the comparison of satellite radio to other technologies that have come and gone into extinction, with the author suggesting that XM and Sirius will go the same course.  He may be right, but the FCC's approval of the merger, with conditions, suggests otherwise.

I'm no expert in technology, but the type of broadband world described in this article is years if not decades away from covering the USA.  Satellite radio was in limbo for over 400+ days while the FCC mulled a decision.  Why would anyone consider adding either service until there was some clarity on the future?  That does not suggest that there will be a massive upswing of new subscribers, but it certainly slowed interest.

The merger allows the company to move forward with its plans.  A lot of money has been spent with lawyers and lobbyists over the past year and change instead of marketing and promotion.  One of these companies would have probably gone under without the merger; with the approval the resources the combined entity has can be restructured to focus on debt, expanding subscribers, and repackaging content.

It's too early to think the new company won't survive.  It will be challenging, but satellite radio is a great product, and with some 17 million subscribers there is a great deal of upside potential. 

Full disclosure, I am and have been an XM subscriber for the past three years. 

Other Analyses of the Same Source Article:
Car manufacturers will deploy satellite radio for many years to come
August 7, 2008, Author: Tim Farrar, President, Telecom, Media & Finance Assoc.
Satellite Radio Will Be Around for a Very Long Time,
August 7, 2008, Author: Samuel Greenholtz, Principal, Telecom Pragmatics

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