In February, I wrote a rather lengthy post on my misgivings about the proposed XM/Sirius Satellite Radio merger. You can read that original post here. In that post I zeroed in on my least favorite item of the original merger announcement: a la carte channels. I argued that allowing consumers to choose a small number of channels on a sliding price scale would take satellite radio from innovation and freedom and turn it into the new cable television. It seems as though I was right on the money. (It’s my horn and I’ll toot it if I want too)
Here is part of a Yahoo! news article released today:
NEW YORK (AP) — Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. said Monday the companies plan to offer a la carte plans to consumers starting at $6.99 for 50 channels.
The two radio satellite operators, which are merging in a $4.7 billion deal announced in February, also plan to introduce two family-friendly plans that will block adult-themed programing.
The companies are filing on Tuesday joint reply comments to the Federal Communications Commission, which is considering whether to approve the merger of Sirius and XM Satellite. The deal, which has faced opposition from lawmakers and consumer groups, also requires approval by the Justice Department.
Under the a la carte option, customers will be able to buy additional channels for as little as 25 cents each. A second a la carte option will allow subscribers to choose 100 channels and will allow Sirius customers to select from some of the best of XM’s programming and XM subscribers to choose from some of the best of Sirius’ programming.
In total, the companies plan to offer eight plans costing up to $16.99 per month. Currently, the companies offer programming options costing from $12.95 to $25.90 per month.
A la carte programming will be available beginning within one year following the merger, and the other programming options will be available beginning within six months following the merger.
“The a la carte options and other packages unveiled today demonstrate that consumers will be the beneficiaries of this merger,” said Mel Karmazin, chief executive of Sirius Satellite. “The efficiencies of the merger will allow the combined companies to save hundreds of millions of dollars a year and give us the opportunity to increase the number of programming options available to subscribers.”
Can you hear that? It is the sound of satellite radio in the midst of its death throws. After reading this announcement I still stand by my original argument against this merger:
Without competition economic growth will slow and customer care will wane. Look back at cable television. You can argue that cable tv faces opposition from movie theaters, DVD, satellite tv, as well as iPods, computers, and game consoles. Yet, rather than meet these challenges head on with great programing, awesome customer service, and revolutionary technology cable tv providers treat consumers with no respect. They act as electronic Don Corleones making us lose-lose offers that we can’t refuse. They control content and only allow us a peak at it with high costs and sliding price structures that change at their whim.
I hate having to chose channels and wade through my cable bill. I’m afraid that the fate of satellite radio will closely resemble this antiquated enterprise.
If the FCC allows this merger to proceed rather than paying a flat fee for a great service you will have to decide which price structure you want and with which channels and with which service. By the time you figure it out they will have changed the price structures yet again.
Meet the new boss, same as the old boss.
