August 20, 2008

A Commentary on the XM/Sirius Merger

So, what's the excitement about satellite radio? Why do people talk about it? The answer: It gives listeners the variety that they don't find with terrestrial radio.

But how long can a company that loses millions of dollars each month in this economy continue to survive. Satellite radio is not a threat to terrestrial radio despite the rants of this guy (Jim Cramer Mad Money) on CNBC. Now that we have the merger, you can't buy a radio that receives both services and why pay for something you can get for free.

The bigger threat to terrestrial radio is: stale programming, internet leaks, file sharing and illegal downloads, ipods. Listening to the radio is not a habit that kids are into. Back in the day, kids/teens woke up in the morning and listened to the radio, but now they grab their ipod and everything's cool in their world. What's the hottest format in the industry? Oldies radio. Classic Rock. Who are these formats appealing to? People who grew up listening to the radio.

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