Sirius and XM Satellite Radio Plan Merger

Sirius Satellite Radio and XM Satellite Radio have announced plans for a merger, pending government approval. Both groups have acquired high-profile talent, including Bob Dylan and Howard Stern. The National Association of Broadcasters opposes the deal, saying it is monopolistic.

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MADELEINE BRAND, host:

And now as you're listening to it, it's changing. A discussion of the future of radio. Yesterday's announcement that the two satellite radio broadcasters XM and Sirius want to merge has set off a bit of a guessing game.

ALEX CHADWICK, host:

Here are some of the guesses: will the government approve the merger - it will have to if it's going to go through - what's it going to mean for listeners and what about all that high-priced on-air talent? Isn't somebody going to lose their job when two operations become one?

Unidentified Man: Speaking of mergers, we're going to be merging.

(Soundbite of music)

Unidentified Woman: You know, I love this radio conversations we're having here because it's just like being in my living room, isn't it?

(Soundbite of music)

Unidentified Woman #2: My next guest has become quite an accomplished chef.

Mr. HOWARD STERN (Radio personality): I'm asking you to spend the rest of your life with…

Unidentified Man #3: …must have been fired at some point.

(Soundbite of music)

Unidentified Man #4: Enjoy this and see how (unintelligible).

(Soundbite of song, "I'll Be Your Baby Tonight")

Mr. BOB DYLAN (Singer): (singing) I'll be your baby tonight.

CHADWICK: Yeah, Bob Dylan. Also Bob Edwards among some of the voices and music you can hear on XM and Sirius. Joining us to discuss the merger and how it's going to change radio, NPR radio media correspondent David Folkenflik.

David, welcome back.

DAVID FOLKENFLIK: Hey, thanks so much, Alex.

CHADWICK: So there was a statement from the chairman of the Federal Communications Commission last night, Kevin Martin. He says, Okay, maybe we'll approve this but it clearly has to be in the interest of the consumer. They have to have more choice.

Now isn't that kind of an insurmountable barrier? I mean, how could you get more choice if you're taking two companies and merging them into one?

FOLKENFLIK: Well, there are two ways of looking at it. One is sort of the regulatory kind of bureaucratic way which is that when satellite radio was licensed about a decade ago, the FCC explicitly said there had to be two separate license holders. There had to be competition. There couldn't just be one.

On the other hand, the chairman also said last month in a response to some queries by reporters - look, it's true, the FCC can change the rules. So the FCC can taketh away and the FCC can giveth, I guess.

The other way of looking at it is that a lot of talent has been acquired by each of these two groups. If you look at - You know, you mentioned Bob Edwards, Bob Dylan, Oprah, Howard Stern, Martha Stewart. I love the idea of them all being in the same studio. Which of course, they wouldn't - but under the same umbrella.

The argument is that, hey, listeners wouldn't have to choose between do we want one that offers the NFL or do we want one that offers Major League Baseball? We could get both. We could get, you know, the one that offers Bruce Springsteen, the one that offers Bob Dylan and so forth. So in that sense if they were to combine the best of both, it could be a pretty extraordinary offer.

CHADWICK: What about opponents to the merger?

FOLKENFLIK: Well, they're real. You mentioned Mr. Martin, the chairman of the FCC. He's indicated real skepticism. And indeed, in a possible analogous situation, the two big satellite television companies tried to merge a couple years ago and that was shot down by the FCC.

The other group is a powerful association called the National Association of Broadcasters. They represent the interests of local television and radio stations. They've already come out gunning for this. They talk about it being the monopolistic practice to create one company out of two.

And they've also made clear the grounds on which they're willing to fight it. They talk about Howard Stern who, since leaving FM for unregulated satellite radio, is now able to be dirtier and raunchier than ever. They're saying, you know, should this really be rewarded? The business model doesn't seem to be working that wonderfully for either one of the two companies separately. That is, they spent a lot of money, gotten a lot of ink but they also have never turned a profit. Why should we reward this at a time that they're willing to broadcast such filth?

CHADWICK: Well, the satellite companies say, look, there's a lot of competition we hadn't planned for 10 years ago.

FOLKENFLIK: And then some, and that's the argument the companies - that's the argument the companies are making. They're saying, look, on the Internet through digital radio that is multi-task stations that each individual station can do up to four stations, there are going to be a lot of ways in which competition is coming at you. It's not clear that satellite is going to be the newest kid on the block at all, so incentives: radio competition, not simply satellite radio competition.

CHADWICK: Media correspondent David Folkenflik joining us from Washington. David thank you again.

FOLKENFLIK: You bet.

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