Monday, November 24, 2008

XM/Sirius Down to Two Years Left?

I continue to hear complaints from subscribers who lost their favorite channels in the recent Sirius/XM merger. Inevitable, but that is not the reason the new entity is not long for this surrounding this world.

Mike Elgan, a columnist for Datamation, a respected IT pub, recently wrote: “I hate to say it, but somebody has to: Satellite radio will come crashing down to Earth within the next two years.” He concedes that satellite radio has gotten better, with smaller receivers and new features. His reason for such a dire prediction is simply that the world is moving too fast for satellite radio to keep up.

“The ugly truth is that satellite is simply an obsolete way to deliver sound,” he says. "Satellite radio is already living on borrowed time – and borrowed money – and simply will not and cannot survive.”

He maintains that such technology as MP3-compatible cars and in-dash mobile broadband will eliminate the need for satellite radio. The big reason, though, is purely financial. He questions whether Sirius XM will be able to refinance its staggering $1 billion debt in 2009, considering what is going on in the economy.

Some broadcasters are already popping open the champagne. They may want to consider that they face the same hurdles before they celebrate so long and hardy that they wake up with a hangover...and no business.

Don Keith N4KC

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