SHIFT: What an XM-Sirius merger would mean (and why no one will care)

When XM and Sirius satellite radio launched less than a decade ago, they were instant archrivals. Coke and Pepsi had nothing on these two. Yankees and Mets are better buddies. These sworn enemies were fighting tooth and nail for subscribers, and seemed to be happy fighting amongst themselves. What they didn't notice was that they were fighting the wrong battle.

I've been a fan of satellite radio since it was first announced. When I got my first XM tuner, I was like a kid in a candy shop. I filled up all three banks of presets, and spread the word on how amazing this technology was to anyone who would listen. I was conducting demos in the parking lot at work. Yup. Big fan.

Although it's clear that I love satellite radio, it's equally clear that most everybody else doesn't. I recently bought a new car, supposedly "with XM." The salesman had no clue if there was actually an XM receiver built into the car, and neither did his manager. Finally, three people later, I found out that my system is "XM ready," and they still couldn't tell me how to get XM in the car (I just needed a plug-and-play tuner connected to the Aux input). If I can't figure out how to get XM, how could the average consumer? Clearly, satellite radio isn't winning any popularity contests.

Sirius and XM have had almost six years to find an audience — why aren't more people tuning in? Follow the link for my theory.

Trouble in the Stars
While the satellite-radio industry and I were busy looking at the stars, another technology was quietly changing conditions on the ground. Small, portable MP3 players were being sold when both satellite services launched, but they seemed innocent enough at the time — not really a threat. Then, a little company named Apple introduced its portable digital audio player. Cute, user-friendly and iconic, the iPod quickly created and conquered the portable market, with a reported 100 million iPods being sold to date.

The satellite-radio guys never saw it coming. While they were busy fighting each other, they didn't realize who the real enemy was. Portability was just too convenient. Too little too late, the sales and performance of portable satellite-radio tuners never took off, probably due to confusion: some were truly portable receivers, some received the satellite signal only when docked at home. Still others recorded radio programming, and could play your own MP3 files. But with 100 million iPod products out there, you can assume those people have a good chunk of their music library stored as AAC files, and thus only able to play on iPods and a few other players. Why take a chance on hearing your favorite song on the radio when you could listen to all your favorites on your iPod?

Other Fronts
Without missing a beat, once the iPod had saturated the portable market, Apple quickly and easily set sights on the home audio market. While a few home satellite-radio products were introduced, every home audio manufacturer was scrambling to produce "iPod-ready" products.

Quietly entering the battlefield a few years ago, HD Radio has recently increased its presence with a massive advertising campaign. HD Radio is free, sounds great, and is easily accessed with a compatible head unit or table radio, broadcasting your local stations with local news and information. Did I mention that HD Radio is free? Many car systems are being introduced with this technology as well as home receivers. Plus, it's free.

What a Merger Would Mean
Like most satellite-radio fans, I feel like I'm the only person who cares what happens when and if these companies merge. I for one hope that together, they'll remain strong enough to survive. I love having the listening options, plus the potential to hear Beethoven in Boise or ZZ Top in Zion. Once merged, the satellite giants can eliminate some of the redundancy in their channel lineups and offer more options in similar categories. Opie and Anthony, meet Howard Stern.

By joining forces, XM and Sirius can concentrate their efforts on developing new technology, expanding hardware options and improving sound quality. Customers can expect their existing equipment to remain functional, but new products with chipsets to receive both services will be introduced. The companies promise that their current 12 million subscribers will benefit from the merge. We'll see about that.

Portable audio players have their place, but many of us still like to hear new music that we'll only discover on our satellite radios. Satellite radio introduces new music, or reminds me of old favorites that I can add to my music library. There's room in the market for satellite radio and "personal" music, and with XM and Sirius merged, there's a chance satellite radio stick around and gain ground. Will the merger attract a significant number of new subscribers? Probably not — it will probably just ensure that the services stay around for those of us already sold on the technology.

Cease Fire
With so many viable options, such as iPods, HD Radio, and even streaming Internet radio and music on cell phones, the merger of XM and Sirius might not be big news for most people. But for those of us who passionately love our satellite radio, this is as big as Apple and Microsoft joining forces. With the promise for benefits such as improved hardware and programming choices, fans of both services could end up winners. But there's a good chance the rest of the world might never get its ears off the ground.