Sirius-XM Merger Doesn't Add Up for Prof. Jeff McCall '76

Sirius-XM Merger Doesn't Add Up for Prof. Jeff McCall '76

June 22, 2008

Jeff McCall 2006.jpgJune 22, 2008, Greencastle, Ind. - "It is sad to see the once-promising satellite radio industry in such a state," writes Jeffrey M. McCall, professor of communication at DePauw University, in the Indianapolis Star. In a column analyzing the upcoming Federal Communications Commission ruling on the proposed merger of rival satellite radio networks Sirius and XM, Dr. McCall declares, "The industry provides great content for music lovers, sports fans and others, but a merger of two under-performing companies won't necessarily help from the engineering or business side of things, and will create an anti-competitive environment that makes consumers vulnerable to price hikes."

The professor, who authored the book Viewer Discretion Advised: Taking Control of Mass Media Influences, notes, "Together, XM and Sirius have only about 18 million subscribers nationwide. The implications of the FCC decision, however, are broader than what happens to those relatively few listeners. First, the decision will tell FCC watchers a good deal about how the commission defines accountability. When the FCC gave the go-ahead to create satellite-delivered radio programming 10 years ago, it specifically prohibited the two competitors from ever merging. The sat-casters expect the FCC to overlook that minor detail. The FCC told the satellite radio providers to create radios that could receive either service, so subscribers could switch between the competitors without having to buy separate equipment. That has yet to be accomplished ... If, as Dr. Phil says, the best predictor of future behavior is past behavior, the FCC should not expect a merged satellite industry to effectively meet any conditions that would be imposed."

McCall also believes a merger of the two never-profitable ventures "amounts to a government bailout. XM and Sirius spent big money on high-priced celebrities and got little subscriber growth for Sirius Logo.gifthe effort."

Access the complete op-ed at College

A 1976 graduate of DePauw, Jeff McCall is a widely quoted media observer and critic, having been interviewed and quoted by more than 75 newspapers, including the Los Angeles Times, Newsday, Christian Science Monitor, and others, and he has also made a number of appearances on radio and television shows. Learn more in this recent story.

Source: Indianapolis Star