Below The Beltway

Last month, the Washington Post reported on rumors that Sirius and XM were considering a merger. Today, the New York Times carries a similar story that points out the reasons why a merger may make sense for both companies:

Both companies have continued to lose hundreds of millions of dollars because of marketing and other subscriber acquisition expenses. During the year, XM sharply lowered its expectations for 2006 subscriber levels, from January?s predicted end-of-year total of 9 million to a maximum of 7.9 million. (Sirius reduced its subscription projection by about 100,000.)

(…)

[T]he vast majority of programming remains duplicative. Each company offers a wide variety of rock, pop, folk, and other musical genres, as well as the same news channels, which include the BBC, CNN, Fox, and MSNBC. Sirius and XM each claim that their music channels are more compelling than the competition?s, but most casual listeners would be hard-pressed to tell the difference.

?The services mirror each other tremendously,? said Richard Doherty, an analyst with the Envisioneering Group, a research firm. ?More people know that one service has Howard Stern than know which one has him.?

Except for a relatively small handful of viewers looking for particular programs, consumers searching for a satellite service in a retail store often make their decision not on the merits of one over the other, but which one is more convenient to buy.

?For the subscriber, it all comes down to which one of the two is closer to the cash register. Customers cannot tell the difference between the two services,? Mr. Moffett said.

Or, in our case, we are an XM family simply because that’s what is available for the Honda’s we own. If we ever did get a satellite radio receiver for the home, I can’t see any reason why it wouldn’t also be XM, but, having listened to Sirius when the opportunity rose, I can’t really see a difference between the two in terms of programming.

The Times article, though, also makes a bigger point that shows the extent to which satellite radio has become part of the mainstream:

[T]here is little doubt that the concept of satellite radio is no longer alien to consumers. According to Sirius, 83 percent of consumers aged 18 to 55 are now aware of the technology.

Mr. Frear became personally cognizant of that when he tried to rent a car with a Sirius radio recently but found they were all taken.

?Every year, satellite radio just sinks deeper and deeper into the public consciousness,? he said.

Perhaps, someday, this will lead to competing networks. Right now, though, it doesn’t seem to make alot of sense.