Devoted to show business and the entertainment industry

Mel Karmazin, CEO of Sirius Satellite Radio (SIRI) has been pushing hard to get their chief rival XM Satlellite Radio (XMSR) to merge with them.

David Frear, CFO for Sirius, also said the merger would help "to reduce costs, and to have a better return."

One of the problems that the industry overall has is that the regular consumer doesn't have one company branded in their mind against the other.

For example, when consumers are asked about which company has Howerd Stern, they don't know. The problem with that from XM's position is that they would inherit the cost of Stern, without getting any added benefit, as from the view of the public, they could be the one that already has him.

The push by Sirius to merge shows that they are in big trouble. They paid way too much for Stern, whose audience didn't follow him to Sirius, and for other content providers as well.

XM's president Nate Davis said that he blames XM itself for their slower-than-expected growth because they didn't add compelling new products to their service, rather than the market itself slowing down.

XM doesn't need to be in a hurry as they are in much better shape than Sirius. They should roll out some new products and see how their subcribers respond and how it affects the growth of new subscribers.
 
At that time they could revisit the question if Sirius is worth taking a look at to be absorbed into the company. To take on the added debt of Sirius doesn't make any sense to me at this time. For Sirius investors it would be a great deal.

Remember to Sign up for my feed, bizzbite and digg this!