# Sirius and XM Combine: What is the impact?



## fun2drive (Nov 16, 2005)

I just read this on Yahoo and my concern about getting the Sirius radio was the fact I assumed this would happen. I am sure neither company will leave their members to fend for themselves.
However I now think there might be a migration to one Sat radio company.
My plan is to go aftermarket after I see how this all plays out.

I would have preferred to have a factory installed Sat radio and I am sure that all the other manufacturers of autos will be scrambling as well.....


----------



## Gumby (May 21, 2006)

Assuming regulatory approval, which isn't a certainty, it will likely be a year or more before there's any impact at all. For a while, the Sirius and the XMSR systems will continue to operate as they do now.

At some point after that, they will combine, cancel some redundant channels, and broadcast signals capable of being received by both Sirius and XM radios.

I'm an old-timer by sat radio standards. I bought my 2004 330Ci in May of 2003 (yes, the '04 coupes were out that early, for some reason), and I got a dealer-installed Sirius integrated into the stock stereo, and a lifetime subscription (lifetime of the radio, that is, not of me), which at the time was $399. Lifetime subs later went to $499, and I assume they're still available. But what's really interesting is that my lifetime sub is transferrable to a new car for $75 -- good thing, because my new 335 hardtop convertible is due here in April. I assume my lifetime sub will continue to be honored.


----------



## sflgator (Sep 22, 2006)

Higher stock prices, thank God!!!  And 4.6 shares of SIRI for every 1 share of XMSR!!!!! :thumbup:


----------



## chuck92103 (Oct 9, 2005)

Gumby said:


> Assuming regulatory approval, which isn't a certainty, it will likely be a year or more before there's any impact at all. For a while, the Sirius and the XMSR systems will continue to operate as they do now.
> 
> At some point after that, they will combine, cancel some redundant channels, and broadcast signals capable of being received by both Sirius and XM radios.
> 
> I'm an old-timer by sat radio standards. I bought my 2004 330Ci in May of 2003 (yes, the '04 coupes were out that early, for some reason), and I got a dealer-installed Sirius integrated into the stock stereo, and a lifetime subscription (lifetime of the radio, that is, not of me), which at the time was $399. Lifetime subs later went to $499, and I assume they're still available. But what's really interesting is that my lifetime sub is transferrable to a new car for $75 -- good thing, because my new 335 hardtop convertible is due here in April. I assume my lifetime sub will continue to be honored.


I believe lifetime in the contract means your can transfer the receiver 3 times for a $75 fee each time. Then you are done.


----------



## BloodRedHog (Mar 9, 2004)

I am doubtful this passes regulators...


----------



## Emission (Dec 19, 2001)

I ordered Sirius thinking this would happen. :thumbup:


----------



## sflgator (Sep 22, 2006)

BloodRedHog said:


> I am doubtful this passes regulators...


Wanna bet???????


----------



## chuck92103 (Oct 9, 2005)

BloodRedHog said:


> I am doubtful this passes regulators...


In this case I think it will. This is not about a monopoly. Two companies are struggling. One will go under before long unless a merger occurs. So we will end up with one struggling company.

I would rather have one healthy company that can offer better programming at a lower cost.


----------



## Double-S (Nov 30, 2006)

chuck92103 said:


> I would rather have one healthy company that can offer better programming at a lower cost.


What makes you think the combined entity will survive? If growth rates don't improve who knows?


----------



## bmw949 (Dec 11, 2006)

What sucks is that they will probably end up replacing the Sirius receivers and keeping the XM technology since there are more subscribers on XM.


----------



## sflgator (Sep 22, 2006)

bmw949 said:


> What sucks is that they will probably end up replacing the Sirius receivers and keeping the XM technology since there are more subscribers on XM.


Well, XM has more subs and the XM technology IS better. FYI -- I had XM in my Infiniti for 3 years and I almost never got any dropouts, while I've had Sirius now for 3 months and I get several 1-3 sec. dropouts on a daily basis (and I live in flat as can be S. Florida). My Sirius Sat Radio in my 335i cuts out when I go under an overpass, through the bank drive-through, and it cuts out for no particular reason...I'm sorry but that's all just b.s.  My XM never did that. It's a fact that the XM technology is better and they have many more land repeaters...so they should keep the XM network.


----------



## chuck92103 (Oct 9, 2005)

sflgator said:


> Well, XM has more subs and the XM technology IS better. FYI -- I had XM in my Infiniti for 3 years and I almost never got any dropouts, while I've had Sirius now for 3 months and I get several 1-3 sec. dropouts on a daily basis (and I live in flat as can be S. Florida). My Sirius Sat Radio in my 335i cuts out when I go under an overpass, through the bank drive-through, and it cuts out for no particular reason...I'm sorry but that's all just b.s.  My XM never did that. It's a fact that the XM technology is better and they have many more land repeaters...so they should keep the XM network.


Both systems will remain in place for several years. Too many contracts in place.


----------



## krash (Nov 26, 2005)

chuck92103 said:


> Both systems will remain in place for several years. Too many contracts in place.


Correct.

Eventually, they will need to have some kind of seamless transition plan to consolidate programming without impacting customers. This could entail taking the best of both and making tough decisions about what to keep vs what to cut (in terms of channels, shows, etc.).

I would guess that things would likely remain as is for at least a year (at a minimum).

Regardless, they would still be obligated to support all existing contracts and radio receivers no matter how they consolidate the 2 entities.


----------



## JSpira (Oct 21, 2002)

chuck92103 said:


> In this case I think it will. This is not about a monopoly. Two companies are struggling. One will go under before long unless a merger occurs. So we will end up with one struggling company.


If they do it right (and most mergers fail, witness Daimler-Chrysler), we will end up with one healthy company. Alternatively, as Net radio comes into the vehicle (ok, it's in mine alread), satradio will fall to the wayside.


----------



## Shark68 (May 25, 2006)

What will happen to the current Sirius receivers in the car?


----------



## Barry626 (Sep 8, 2006)

Gumby said:


> I'm an old-timer by sat radio standards. I bought my 2004 330Ci in May of 2003 (yes, the '04 coupes were out that early, for some reason), and I got a dealer-installed Sirius integrated into the stock stereo, and a lifetime subscription (lifetime of the radio, that is, not of me), which at the time was $399. Lifetime subs later went to $499, and I assume they're still available. But what's really interesting is that my lifetime sub is transferrable to a new car for $75 -- good thing, because my new 335 hardtop convertible is due here in April. I assume my lifetime sub will continue to be honored.


Might want to check this should not be a fee to transfer?
I bought my 06 330i with Lifetime subscription for $345.00.
They deducted the $155.00 for 1 free year that came with radio.
I have since sold the car & bought my 07 335i which transfer was free.
I get total of 3 transfers to new cars free & then subscription ends.
Sirius still has "Lifetime Subscriptions" for $500.00 XM does not have Lifetime!

I received email today from Sirius.
Sirius & XM will be one this fall.
Until then nothing changes with either company.


----------



## Celsius (Aug 20, 2006)

All I know is that the programing on SIRUS BLOWS XM out of the water! XM programing sucks! Why do you think Howard Stern in on SIRUS & SIRUS is offered on DISH?:thumbup:


----------



## Double-S (Nov 30, 2006)

Jspira said:


> If they do it right (and most mergers fail, witness Daimler-Chrysler), we will end up with one healthy company. Alternatively, as Net radio comes into the vehicle (ok, it's in mine alread), satradio will fall to the wayside.


+1
A very likely scenario.


----------



## KevinC (Oct 29, 2005)

Celsius said:


> All I know is that the programing on SIRUS BLOWS XM out of the water! XM programing sucks! Why do you think Howard Stern in on SIRUS & SIRUS is offered on DISH?:thumbup:


I (and many others) disagree 100% with that statement. Howard's schtick is older than dirt and Sirius spent WAAAAY to much money on him. XM's stream quality is VASTLY superior, and I like their overall programming much better (yes I do have both). The only thing that Sirius has over them for me is the NFL.


----------



## carl_lazlo (Oct 3, 2006)

For what it's worth:

I currently work with the man who designed the DSP circuitry thats in every Sirius radio. (His hardware is what actually converts the digital bitstream) I also did some work for Sirius a few years ago with another group.

Anyway, he and I have been talking about how on a technical level this merger can be accomplished. Surprisingly the technology behind both Sirius and XM is very similar. (Aside from encoding schemes, encryption, etc) Both have a fixed spectrum pretty close to each other. They both break the band they own up into 3 segments; the two outer are for the birds and the center band is for the terrestrial repeaters. They both do a time offset between sats to help with FEC. The reason some people bitch that XM is more reliable is more a function of the orbits and power outputs of the birds. Sirius uses an elliptical orbit while XM's are stationary. Also, XM dumps about 10db more power out of their birds than Sirius. Since XM birds are geostat over the equator they pump the extra power so people in the north can have coverage.

Just read the wikipedia pages for both companies to get more info on the technology (What has been made public)

Here's the point, they are not going to force people to buy new radios. Without going into details I can assure you that they will offer a solution (for free) within the next 15 months that will solve the issue.

Oh, and for those who don't think this will go through...just wait and see. :thumbup:


----------



## nowonder (Dec 4, 2002)

Coverage of the conference call this morning discussing the merger from http://www.siriusbackstage.com

As we mentioned earlier with the merger announcement, there will be a conference call today at 8:30 with Mel Karmazin from Sirius and Gary Parsons from XM to discuss the merger. Listen to it live on channel 122 on Sirius, channel 200 on XM, or at investor.sirius.com.

We will use this post to update you throughout the call, similar to how we do it for quarterly conference calls.

You can also feel free to join us in the chat to talk about the conference call, and get information even quicker. To get to the chat, click on 'chat' at the top of any page on Sirius Backstage.

Update: They have added an Investor Presentation to the site(pdf format)

-Onhold music is playing
-Sirius 122 doesn't have the conference call yet, just a replay of the Afternoon Blitz
-Not on XM 200 either yet
-Tune to CNN 132 or on your telly right now for a story on satellite radio merging(over)
-Sirius 122 saying the CC coming at 8:30(1 minute to go!)
-Music started on 122
-Conference Call will begin shortly. Webcast is 5 seconds behind Sirius
-Conference Call started at 8:35a
-Reportedly still a loop on XM
-Mel doesn't have any audio; feed went dead
-back to onhold music
-Back 8:42a
-Mel Karmeezee, according to the operator 
-"next logical step in the evolution of satellite radio... will create long term value for the shareholders of both companies"
-bring people from both companies
-see total cost savings of $3 billion to $7 billion
-they will deliver more cash flow faster merged than as a single company.
-expects to offer more diverse programming for underserved interests
-best content from both companies
-will be able to offer radios with signals from both companies sooner merged
-radios will be cooler, lighter, smaller, etc.
-merge the satellite and repeater infrastructure
-offer live video, real time traffic and weather, and "infotainment"
-they can expand the market with more "compelling content"
-only type of transaction that works long-term
-still onhold music online
-more advertiser potential
-147% growth over the last 4 years
-estimated $1.5 billion growth in revenue this year
-if you like corporate buzzwords, listen to this presentation
-confident they have the right strategy
-Still deciding name and location of the new company
-hope transaction to end by the end of 2007[ed note: good luck]
-Hugh Panero will exit at the completion of the merger
-they will remove duplicate channels to make more niche programming
-lots of emerging competition is causing them to do this
-expect shareholder vote in 4-6 months, with regulatory approvals within 9 months
-hope this additional programming will allow them to grow their subscriber base
-there is some other info I'm not covering because it is already provided in the press release from yesterday
-expect all the specialty content from both services such as Stern, Oprah, etc. to be merged onto one service.
-Q&A time
-believe there are synergies in every single line item
-cannot give synergies right now because of anti-trust
-says they would not go into the transaction if they thought it was not in the public interest
-breakup fee: confirms what Orbitcast said earlier of $175 million
-breakup fee paid if one board does not recommend the transaction, so either could be the recipient
-Mel on regulators: "we're going to corrup, I mean cooperate with them"
-webcast works now
-better value proposition to the consumer and the companies
-research says there are people out there that like both companies' contents and having two radios is not as attractive as having a single radio that receives both.
-both engineering teams working on radios that receive both systems
-on redundant channels: exclusive content deals can be changed to a shared content deal in the interim but didn't provide a date on when the new channels could be merged
-both companies will continue to operate as they have been for now
-will the have enough power in the satellites to broadcast 25 MHz of bandwidth? Have the ability to integrate both systems together with additional development
-have the viewpoint that they are not using the repeaters for local programming, and that broadcasting local content nationally is ok
-"NAB putting down everything competitive to them"
-Merger changing the royalty agreements with the OEM auto manufacturers? Retail is the big driver, and will be the first to have interoperable radios. Think the OEM partners see great promise with a combined company.
-Sirius-5 satellite will still launch in 2008
-Pricing: not commenting directly on the issue, but talking about a combination of price and product.
-Unlike DISH and DirecTV, the market is not all pay services right now; only 10%
-advertising line item will "contribute significantly" to ARPU over time.
-Sirius today doesnt' want to do anything that will slow down the growth of satellite radio
-SIRI opens at $4.04; XM at $16.30
-With millions and millions of radios out on the current spectrum, it would not be in the public interest to give back spectrum in order to get the deal approved
-The surviving platform is "both", very quick to answer that
-process of getting the waiver from the FCC on the spectrum for the merger: within 25 days from the signing of the merger agreement, they will file their application at the FCC, and then the five commissioners will vote on it after they go through their red tape
-$26 people have to pay to get both services right now can be lowered
-transaction will give more significant free cash flow
-asked if they will buy back shares, Mel just provides options of what to do with free cash flow
-team in Boca Raton working on the interoperable radio
-conference call ends at 9:40a

Quick analysis:

-They did not mention how long it will take to consolidate into one service. This could mean several years until that happens. They also did not comment on future pricing of the service once it does combine, or what will happen to older radios. It seems those might be questions down the road to look at.

-It is surprising to see that they will continue development on the Sirius 5 satellite. I thought that to be an area we would see significant cost synergies of at least $100 million if they stopped development of that.

-There is a website coming together that will be 'coming soon' called http://www.selectsatelliteradio.com


----------



## eyedoc (Jan 24, 2006)

nowonder said:


> -Mel on regulators: "we're going to corrup, I mean cooperate with them"


:rofl:


----------

