FCC approves XM & Sirius merger. World to end at high noon.

Recently I accused FCC commissioner Jonathan Edelstein of "selling out" his normally-left-leaning values, in that he was willing to approve the XM-Sirius merger if various conditions were met. Conditions that were stricter than what had been originally proposed, but frankly, were ultimately meaningless in the face of a government-sanctioned monopoly...which is what XM/Sirius are.

I personally feel this merger is bad news no matter what conditions are imposed, hence my feelings about Edelstein.

Well, I give Edelstein some credit back. When it became apparent that fellow Commissioner Tate was the real sellout and cast the swing vote in favor of the merger...WITHOUT the extra conditions...Edelstein voted against it, after all.

This is still horrible news, but at least Edelstein gets some street cred back.

Quick reminder: both XM and Sirius have been paying quite a lot of money to NPR and other public radio content providers for the rights to air said pubradio programming. With a monopoly in place, you can bet that gravy train will be coming to an abrupt end pretty soon. This is bad news since that revenue was helping a lot to pay for other new initiatives, and it couldn't come at a worse time overall-economy-wise.

BTW, technically this is not over just yet. Various factions - like the NAB and NPR - can and no doubt will sue to block the merger. The merger will almost certainly be frozen until the court case is resolved, which will take months or years. In other words, long enough to see a new President into office. If Democratic Presidential nominee Barack Obama wins, by law that will shift the makeup of the five FCC commissioners, from three Republicans and two Democrats, to the reverse of that. It might even force the current FCC commissioner/chairman, right-wing, secrecy-obsessed, and under-Congressional-investigation Kevin Martin, out entirely.

Needless to say, an FCC commission with a Democratic makeup might be a lot more inclined to block the XM-Sirius merger. Even with Obama in the White House, I wouldn't take it to the bank, but it could happen. We'll see...

The FCC sells out to Mel

I guess we know where Jonathan Adelstein's bread is really buttered. Adelstein, a Democrat appointee to the five-member FCC board of commissioners, is usually known for being a rather "liberal" member, often taking any stance that opposes "big media" from getting any bigger.

Well today he sold out. Oh sure, he's trying to extract a bunch of conditions of the deal...and I give him props for one of the conditions being that any satradio receiver has to include an AM/FM tuner (no word on if that tuner has be HD Radio-compatible as well...that'd be nice if it were).

But ultimately this is still two big companies becoming a sanctioned monopoly. Our government has a bad history of "regulating" monopolies. And I don't care what price restrictions or channel reservations you insist a merged XM-Sirius have...ultimately the consumer is going to get screwed. You'll see more ads. You'll see lower programming quality. You'll see cheap, disposable talent. And, yes, eventually you will see higher monthly subscription fees.

In essence, you'll see what happened to AM and FM radio when the FCC lifted the ownership restrictions on that: the entire industry went to hell. Well, okay, the industry was already in hell...but it went from the third circle straight to the tenth, ya know?

Congratulations, Mr. Adelstein...you just made a deal with the devil. Now go wash your hands.

DOJ Approves XM/Sirius Merger - How this will Hurt Public Radio?

It's all over the news, but Current gets the link for having a collection of links themselves. :-)

So yesterday the Dep't of Justice approved the XM/Sirius satellite radio merger. It still has to be approved by the FCC but don't expect them to deny it, not with Kevin Martin in charge. And expect Martin to ramrod it through before the election and his almost certain ouster (it's just a hunch, but I doubt McCain or Clinton/Obama will keep him around).

People can wax and wane all day about how this will or will not be good for consumers, for radio, and for media in general. I have only two specific points to make:

First, I really hope that, should this go through, it means they'll have home TEAM announcers for all the MLB baseball games, instead of just the home FIELD announcers. I'm not paying $14/month to listen to those horrid Yankees announcers when my beloved Red Sox are playing in the Bronx.

Second, I see no way this is not bad news for public radio...and in a very specific way: program licensing fees. Both XM and Sirius pay tidy sums to NPR, APM, PRI and dozen or so independent shows each year for the right to air their shows on the satellite "public radio" channels, like XMPR and NPR Now (on XM and Sirius, respectively).

A major factor in those tidy sums was each satradio operator trying to outbid the other to get the programming they deemed compelling enough to lure listeners to satellite radio.

I won't say which, but I have it on good authority (as in, from the guy who writes the budget) that a Top 10 Arbitron market NPR affiliate (i.e. one of the big ones that produces a few national shows that many other stations carry) was getting more revenue for their station from XM/Sirius programming fees than they were from NPR programming fees.

I'll say that again...XM/Sirius were paying this station MORE for the NPR programming than NPR itself was. That's a stunning statement...and indicative of perhaps how out of control the spending has been at XM & Sirius.

Discussions on best practices in business and budgeting aside, I have no doubt that many of these stations - and the networks themselves - have gotten used to those tidy sums padding their budgets. And I can almost guarantee you that at the next contract renewal, those tidy sums will be a lot less tidy. Why shouldn't they be? XM/Sirius knows damn well they overpaid for most of their content and now there's no other satradio operator to sell your wares to if one refuses to pony up.

So there it is in a nutshell - this merger actually is "bad" for public radio in a very real and tangible way.

Brand Management

A nifty blog called "Websnark" had a great discussion of "brand management" recently. Just yesterday I had cause to reflect on this. I was visiting Minneapolis and my rental car happened to have Sirius satellite radio. I was getting my weekly WWDTM fix and during the "commercial" break Sirius ran a promo for the Sirius "Patriot" Channel, which is their conservative talk channel. And this was your typical "We're here to stop liberals from destroying America" promo. Literally, I think the promo guy actually said that once.

Now I'm not going to lie here...my politics skew pretty liberal/progressive. So yeah, I don't like conservative talk - it's typically ultra-right wing. It gets my blood pressure rising quite a bit, but what really got my goat in this case was that I was hearing on the NPR Now channel on Sirius!! This is, by any definition, a massive failure of brand management!

While I, and many others, think the "ultra left wing" label that NPR often gets slapped with is, to put it mildly, rather undeserved. It's far more centrist these days, with perhaps some liberal/leftist leanings. So most of its listeners are probably not going to be conservative talk radio fans, so why the heck was Sirius running "Patriot" promos on the NPR channel?

It's certainly not going to "broaden their listening horizons"...at best it's going to make them wonder what the heck is going on. At worst they'll shut their radios off. While that might not matter too much to Sirius since subscribers pay whether the radio's on or off...it should matter to NPR. Contract or no contract, it looks bad for NPR to have this exact-opposite programming popping up in the middle of their flagship entertainment program.

To paraphrase Websnark: bad promo manager! No donut!

Damn your brutal honesty Mel!!!

Sirius Satellite Radio sucks less. No really, at a recent shareholder meeting, Sirius CEO Mel Karmazin...in a fit of stunning honesty...said (I quote) "We suck less" (compared to rival satellite radio provider, XM Radio)

Wow. You wouldn't think that's a good way to describe your company, but there's suddenly this part of me that really wants to go out and buy a Sirius satradio. After all, "sucks less than XM" is exactly how I would describe Sirius, ya know? It's nice. It's got some good stuff on it. It's not really worth $13/month, though. And yeah, it's a hair better than XM.

But the weary and cynical consumer/engineer in me respects honesty from the corporate world. It seems so rare these days that I feel the need to reward the rare company that tells the truth.

Damn your brutal honesty, Mel. Now I want to buy your sucking-slightly-less product!!! :-)

Zipcar dumps, blames XM Radio

Okay, I've been a Zipcar member for about eight months. This evening I got an email from Peter Demers at Zipcar. I'll quote the relevant part of it here.

Sometimes if you love something, you just have to set it free. So, even though we know that so many of you love XM's tuneage and ad-free format, we've made the difficult decision to break ties with XM while things get sorted out in the satellite radio industry (there's serious talk of XM and Sirius merging).

Now I like Zipcar quite a bit, actually. It's let me save a bundle on expensive Brookline parking...and I still have a car when I need it. But don't forget that Zipcar strives to create a sense of community amongst its members, and they shamelessly encourage a sense of smugness in their members: Aren't you a smart Zipster?

The downside to that cultivation is that your members expect a straight deal, and they'll turn on you if you fuck with 'em. So I really feel my intelligence is being insulted here. "Break ties while things get sorted out"??? Excuse me??? I call SHENANIGANS!!! Where's my broom!?!?

Besides the fact that a merger between XM & Sirius is anything but assured - there has been no indication of any current changes in prices or availability, nor would there be any changes even if a merger does happen. Not for at least a year or two...well beyond the scope of any "fleet" contract between XM and Zipcar.

I rather suspect the real story is that Zipcar is getting hammered by rising fuel costs and the allure of XM Radio is rapidly fading. With 2500 vehicles costing $13/month for a questionable benefit...that's a tough expense to justify.

But just TELL us that; we're big boys, we'll understand. Don't toss out this really fake-sounding "excuse".

And if the email is really telling us the truth...then man, it was badly written.