Saturday, April 14, 2007

XM and Sirius Merger. Does it matter?

Many argue that a merger of the only two satellite-radio providers in the country would monopolize the industry, but does it really matter? Listeners are awed, and rightly so, by the crystal-clear quality of digital sound and the extraordinary variety of stations they can listen to cross-country. What they may be overlooking is the relation of this technology with all other Internet-based solutions.

More and more radio (and some TV) stations worldwide are now offering real-time broadcasts that listeners can tune into from any Internet enabled device. Increasing bandwidth speeds have taken sound quality above regular FM and in some cases near CD-quality.

The second issue is mobility. While currently the only practical way to connect to these stations is through a wired or Wi-Fi connection to the Internet, upcoming technologies such as WiMax and 4G CDMA technologies will make a data connection as ubiquitous as the signal on your cell phone. Add this technology to devices such as the Squeezebox and you’ve got yourself a revolutionary music device that can deliver virtually any radio station anywhere there is Internet access (which soon will mean everywhere).

All of this sounds exciting for the consumer. It should. But now it becomes questionable whether XM and Sirius will be able to continue providing differentiating value-add services, whether as separate entities or as one.