Oh god. Where to start.
The merger talk only mentions HD radio as a means to making it sound like there's a lot of technology conspiring against them. In the slideshow, HD radio is shown alongside WiMax, in addition to the iPods and whatnot. Neither are going to be a threat to the conventional radio model for quite a while.
The more it looks like they must combine to survive, the more likely the merger will go through. Greased palms won't hurt.
I'll be shocked if they pass regulatory muster without giving up one of the licenses. The FCC currently forbids one company owning both SDARS licenses. If they give up one, that would leave them with no more spectrum (12.5 MHz) than either company has right now.
Biased opinion begins now.
I'm wary of the merger. It's just my opinion, but any move that benefits "shareholders" hurts the "consumer".
Still on a personal note Mel Karmazin will head the combined company. He likes Howard Stern and doesn't like Opie & Anthony, whom I enjoy listening to (because, at heart, I'm an immature child?)... Which makes me wonder if they won't make the cut, despite being the top-billing and oft most listened to channel on XM.
Back to unbiased opinion.
XM and Sirius have been working on interoperable hardware for a while, as if they were expecting this move. If and when such hardware becomes available, it will mean one line of hardware for both services, simplifying selection... Especially for the sizeable number of people who currently subscribe to both services. And post-merger a mid-term plan is to offer channels from both services on an ala carte basis to help consumers with costs.
As I understand it, both services have achieved cash-positive flow, which I can only assume is an overly complicated way of saying they actually are made some money last quarter.
I don't think the business model is bad. I think the execution has been less than stellar. You have an FM-like clone, minus commercials (Sirius) and a deep-playlist jukebox with boring talent (XM). You've got both chasing high dollar contracts with people who don't draw radio crowds (Oprah and her once a week show) or who are washed up to a degree (Martha Stewart). And then there's the lucrative but expensive sports contracts. Throw in bandwidth-wasting traffic channels and a deal with Clear Channel that turned sour (for XM, anyway) and you've got problems.
Churn is becoming a problem for both services, although I think XM's suffering the brunt worse... Sound quality issues on both services are atrocious, and both have their own problems regarding reception in certain buildings. Those two problems alone probably cause churn worse than the all-you-can-eat Tex-Mex buffet night at Western Sizzlin'.
Where am I going with this? I have no freakin' idea. ;D
Whatever happens, I'd rather pay for medicore sound quality, good music and interesting talk radio than suffer through "local" satellite-fed boring FM radio.
Mike: While a merger won't add radios, it'll make potential adds easier on down the line. Having completely incompatible hardware lines puts a damper on "jumping ship" to the competitor. Why would I buy another sat radio when I've already invested in my current one. With home kit. Kinda like me asking, "Why would I spend more money on an HD radio when I've already invested in XM equipment?"
Supercaster: You forgot one thing with your DSP chip:
AM stereo. It can be done. Rumor has it my ol' 2000 VW's stock radio had C-QUAM decoding in the software, it just wasn't switched on.
