Friday, October 17, 2008

Sirius XM: Load gun, shoot self in foot

Word got out over the last few days that Sirius XM has begun layoffs in XM's Washington, D.C. facilities, covering both off-air and on-air staff. Sirius has long had better talk channels than XM, and XM has had the better music channels. The thinking, when the merger between Sirius and XM was first announced, was that Sirius' talk and XM's music channels would be combined, by and large, into the new service. That's not what appears to be happening. It now looks like the plan is to shut down XM's Washington facility and keep most of Sirius's program structure in place.

That's fine if you're already a Sirius subscriber, but not so great if you prefer XM's music. That in itself should cause a significant drop-off in subscribers once the carnage at XM is complete. Add in the dramatic fall-off in new car sales, combined with hesitancy on the part of informed buyers to install any new satellite radio receiver until models that can support the combined services are available, and you've set the stage for significant net subscriber losses.

Everyone knew that the merged companies had to eliminate duplication and decrease operating costs, but it's beginning to look like the merger of Sirius and XM is going to result in Sirius. There were a lot of reasons why people chose to subscribe to XM rather than Sirius; it was much more than which satellite receiver came with their new cars. Many of those subscribers are going to have to look elsewhere for audio entertainment.
Reblog this post [with Zemanta]
Post a Comment