Up in the Air
But Karmazin, in several statements, has claimed quite the opposite. Combined revenue would actually enable one larger company to provide more selection and features than are presently unavailable, he said. If that single, presumably more powerful company fails to differentiate itself still from other entertainment sources, it would stand to lose more subscribers than it would gain, he added.
Assuming that receivers would be interoperable and that more features would be added to the current slate of programming, dealers could stand to gain from the merger as far as hardware is concerned. According to a press statement issued by Sirius and XM in February, “The combined company will offer automakers and retailers the opportunity to provide a broader [range of] content offering(s) to their customers.” The statement said CE retailers, including Best Buy, Circuit City, RadioShack, Wal-Mart and others, “will benefit from enhanced product offerings that should allow satellite radio to compete more effectively.”
Though neither company has admitted that dire business is a catalyst for the proposed merger, according to CEA statistics, sales of satellite radio plug-and-play tuners fell 13 percent last year. Home radio sales also slipped 22 percent. A 2005 CEA survey found that eight percent of all American households planned to buy a satellite radio within the next year. By the end of 2013, CEA had forecasted 39 million subscribers would sign on to satellite radio. But a study by Openheimer & Co., an investment research firm in New York, suggests satellite radio growth has been leveling off, with an estimated five million new listeners signing on each year. A sign for a mature market perhaps, but it’s certainly tough on two companies competing for these subscribers.