[hugh]

In a stunning announcement yesterday, The Competition Bureau of Canada said that it does not intend to make an application to the Competition Tribunal to challenge the proposed acquisition of Sirius Canada by XM Canada under the merger provisions of the Competition Act.

According to the competition bureau of Canada, this merger will have little if no impact on competition.

And who did they speak to come to this conclusion? Sirius Canada, XM Canada and some retailers.

Did they talk to consumers?

 

[starchoice]

How can it have any impact on competition? The Canadian companies are just reselling what originates in the States from one (already merged) company

 

[hugh]

Ask all the folks that are seeing all their renewal rates going up.

The reality is that if you have two distributors of a product in Canada or two retailers of a product in Canada, the prices tend to be better than when there is only one distributor or one retailer.

 

[Danster]

Competition from who? There are no other satellite radio providers. Ridiculous.

 

[mr weather]

Well, my take is that if they had been refused to merge, one of them (probably XM) would eventually go belly up. Then you're down to one provider and back to where you started.

 

[hugh]

Then let one go belly up. Are we afraid that some shareholders might lose some cash? Sirius Canada was thriving and wasn't going belly up. XM Canada was crowing in their financial statements about the improvements they had been making.

The reason this merger was done was to make more money for shareholders. Money out of consumers pockets.

Competition is good. The competition bureau should know better.

 

[repatch]

Biased article much?

I'm quite surprised how blatantly biased this article is.

So, let me provide and alternative viewpoint:

The article assumes that XM and Sirius are the only competitors in the game, and letting them merge creates a monopolistic situation. This is wrong on several fronts:

- XM and Sirius have never really competed in Canada. Their prices distinct at the beginning but soon became pretty similar, and given what a subscriber was interested in, often only one service supplied what they wanted. If you wanted MLB only one was an option. If you wanted Howard, only one was an option.
- When satellite radio debuted it was pretty much the only pay option available. But it's competition remained vast; terrestrial radio is a MAJOR competitor due to it's zero cost and FAR better reception/size ratio (an FM radio is FAR smaller and more portable then the best sat radio receiver, and has staggering battery life in comparison). A major form of competition for many people is their iPod, why hunt for a sat signal when you iPod contains all the music you could want
- Lately another major competitor has arrived: internet radio. It comes in for pay and free versions, and due to the vast penetration of smartphones is a major source of competition

Personally, I signed up for Sirius US a few years ago to get Howard (before he was available in Canada). When my brother dropped his subscription (that we shared) Sirius wouldn't offer me any sort of retention deal. My smartphone OTOH had many options for commercial free music, so off I went. I haven't looked back.

Letting them merge won't effect the market in the least, they can't raise their prices much simply because their competition is so strong. Consumers have nothing to worry about.

 

[ALSto]

Letting them merge won't effect the market in the least, they can't raise their prices much simply because their competition is so strong. Consumers have nothing to worry about.

Time will tell about cost increases because, as Hugh says, its about return to shareholders and not the consumer. I can't say I agree with you on competition because your not comparing apples to apples. Internet radio can't compete with satellite radio in the car and the coverage area made available by sat radio services. Terrestrial radio is free but limited to local/regional coverage within a specific broadcast range.

 

[repatch]

Not apples to apples?

Really? Is you basis on "not apples to apples" based on coverage? (clearly you can't mean use in the car since my cell phone easily fits in my car, and hooks up to my car stereo the exact same way the sat radio did, same with an iPod).

Well, against the "iPod" it's clear that the iPod has FAR better coverage, since it works even in a subway tunnel.

Against internet radio, for the vast majority of consumers the coverage is identical, how many places do you go in a day where you cell phone can't get a signal but your sat radio does?

Against terrestrial radio, for a great majority of consumers the coverage is also pretty much identical (sometimes better for terrestrial since it's building penetration is FAR better, ever try getting your sat radio working in an office environment?). First off very few consumers leave their "local" broadcast area very much. For those that do, there are very few places where clear channel/CHUM and their ilk don't have at least one live signal.

I've heard this "it's not apples to apples" complaint a bunch of times, but when you get down to it, consumers don't give a CRAP what the technology behind things are, they want music/talk, however they can get it. It's like saying gas and diesel vehicles don't compete with each other since their fuel is different.

 

[ALSto]

Really? Is you basis on "not apples to apples" based on coverage? (clearly you can't mean use in the car since my cell phone easily fits in my car, and hooks up to my car stereo the exact same way the sat radio did, same with an iPod).

You obviously live in the city and don't drive much on long distance trips in non-urban areas where there is no cell/data or FM coverage. An iPod is not a receiver.

Anyway, I am not going to debate this with you, justing stating my experiences based on your arguments & my satellite radio raison d'etre in my car.

 

[hugh]

You obviously live in the city and don't drive much on long distance trips in non-urban areas where there is no cell/data or FM coverage. An iPod is not a receiver.

Totally agree.

In competition jargon, iPod and Internet radio are imperfect substitutes.


IMO, The competition bureau has rolled over and died on this one.

The competition bureau is supposed to represent the interests of consumers not producers

While I see tons of benefits for Sirius Canada, XM Canada etc, I see none for consumers.

Nowhere in the competition bureau's statement did they say how this merger would benefit consumers, only how it would benefit shareholders.

 

[starchoice]

Bottom line - if the merger went through in the U.S., there is no way Canada could not follow suit, however you want to colour it.

 

[ScaryBob]

In case anyone missed it, the competition bureau rolled over and died in the 1980s. Personally, I don't see how this decision could be avoided. XM Canada was on its way down for the last count anyway. I doubt the competition bureau even looks at location, quantity or quality of the competition for every Canadian. It exists in the form of terrestrial radio, DVDs (or cassettes ), MP3s or alternate technologies for the majority of Canadians. Therefore, the merger is approved.

 

[Dwayne Gorniak]

I have been with Sirius for years. I have not considered switching, because since the merger in the U.S. the content is pretty much the same to me. So I don't see any benefit in switching over to XM. If these two companies had diiferent contents and different packages, I would for sure keep on eye on what competion would benefit me. I do see it as a monopoly if XM buys out Sirius. I think it's outrageous. The competition Bureau obviously has there heads in a dark hole somewhere and can't see reality.

And to Repatch..........Your fancy city equipment doesn't work worth a darn out here in the wild west of Alberta. The cell phone networks out here are horrible for dropping service.

 

[mr weather]

You obviously live in the city and don't drive much on long distance trips in non-urban areas where there is no cell/data or FM coverage.

Or even if you're in an urban area there are still data overage charges you may incur if you stream audio over your smartphone. On my personal BlackBerry I've got 500 MB a month and simply using the XM app will eat that up very quickly.

 

[Dwayne Gorniak]

Are there any chances that the CRTC may put a stop to this deal? I'm not a fan of the CRTC, but it would be nice to see them do something decent for once.

 

[Walter Dnes]

Given that the US, with 10 times our population, couldn't support 2 standalone satellite services, there is no way Canada could do so. And after the merger in the US, Sirius and XM are equivalant to two different optional pay packages on a cable TV system.

Also, I wouldn't be surprised if the US parent was pressing for a merger so that they could dump half the Can-Con channels, and use them for channels that draw more listeners/subscribers. Or maybe just reduce the overall compression to allow better sound quality.

 

[Shootmaster_44]

Count me in the opposite camp on this one. I can't believe it has taken them this long to even get this close to merger. As for benefits for the consumer, from a Sirius side I see lots. I have had Sirius since 2006 and have seen the live sports coverage slowly dwindle on it. Initially, it was just the NHL since they signed an exclusive agreement with XM. However, since the merger happened in the US, I've noticed that NBA games have dropped off and many NCAA games have disappeared. Sirius' sports coverage is limited to all the NFL, CFL, NASCAR and some NCAA games from a domestic perspective.

With the music stations being identical on both Sirius and XM since the US merger, I see zero reason for the Canadian companies to both exist. If one of the Canadian companies was a standalone company (akin to a Canadian cable television provider), then I could see a benefit to having Sirius and XM. But when you look at what is offered on the Best of XM on Sirius and vice-versa (which is exactly what will be opened up once they merge) the unique programming will be on both. The only thing that will remain on one and not the other would be MLB, however, I had heard that SiriusXM in the US was working on fixing that.

So I see no problem from this consumer's perspective with the merger for them. In fact, I would be severely upset to see the Competition Bureau having a problem with this.

 

[Shootmaster_44]

Then let one go belly up. Are we afraid that some shareholders might lose some cash? Sirius Canada was thriving and wasn't going belly up. XM Canada was crowing in their financial statements about the improvements they had been making.

The reason this merger was done was to make more money for shareholders. Money out of consumers pockets.

Competition is good. The competition bureau should know better.

Now the problem with you scenario is exactly the opposite reason for merger. If you allow one brand to fold then those consumers with that brand's technology would be forced to buy the other brand's technology or revert to terrestrial radio, iPods, CDs etc. As we have seen with the US merger, they have not forced anyone to buy new technology. If you have an XM radio, you can still use and vice-versa. The only dual band one exists in Mel Karmazin's office according to Howard Stern.

So by not merging and allowing one brand to go belly-up, you are actually doing a disservice to the consumer. The technology is not interchangeable, so those with the wrong brand would have to shell out money to the other brand to acquire their technology. The Competition Bureau ruled correctly in this issue and I applaud their decision.

 

[Pacific Pete]

I think the CRTC vote is March 7.

Living in the mountains,XM has drawbacks due to the low angle the satellites, have on the horizon. Therefore travelling in valleys that run East, and West, there is no reception.
If the merger goes ahead, does anyone think that Xm and Sirius will use one set of satellites, that will improve reception, in the fringe areas, of Canada, and in the mountains.?.

I hope in all this talk of mergers, etc these companies LISTEN carefully to the subscribers, comments, and that reception, and customer service,improves. If not ,I will not renew. I have been a customer for 5 years,now,but loyalty , means nothing when you call the customer service line.

Pacific Pete,and the crew.