Wednesday, September 10, 2008

Sirius XM

Today, Sirius XM announced their "best of" programming packages, essentially the cross-programming that they will offer subscribers of the respective services. Sirius subscribers will get Oprah, the NHL and the NBA. XM subscribers will get Howard Stern, the NFL and NASCAR. This benefit will be available to consumers at the low-low price of $16.99/month, a $4 monthly premium to their existing subscription price. This programming offer was a pre-condition of the Sirius-XM merger. Today's announcement came to me through an industry trade journal and was no where to be found on either company's website. So, my question is, "are you sirius?"

As someone who has been anxiously awaiting this industry development I am quite disappointed with what the post-merger company has delivered. Information related to this development has been hard to come by. My hope was that the combined company would use this event to announce a bold new approach in radio. I was wrong. Short of that, I at least wanted to know what I would be getting in the "best of" package. Not only does the package fall far short of the most meager of expectations, it falls way short of the spirit of the merger. Which brings me to my next question, "what the heck is Mel Karmazin thinking?"

There are few moments in a company's life where they can accelerate growth, generate goodwill and essentially "do the right thing". A major merger such as this is one of them. The fact that there is standing demand for cross-programming and that the company is not offering something that consumers are willing to pay for is shameful. Shareholders should be outraged. Subscribers should be angry. Where is my Major League Baseball? I would pay $4 more per month just for that. Now I'm left to wonder whether $4 is worth it and how many Capitals games I'd actually be able to listen to.

Finally, after looking at both packages, and all things being equal, I believe the arbitrage opportunity is to ditch Sirius and sign up for XM. That way, you get all of what XM has to offer (MLB included) and you get truly the best of what Sirius has to offer. This assumes that you get the NFL games in addition to NFL Radio.

Tell me what you think.

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