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Discussion in 'DIRECTV General Discussion' started by Athlon646464, Aug 3, 2013.
I find it funny how the Sirius XM merger always comes up.
Look at the stock prices. Enough said!
It is a natural part of the discussion when one is talking about merging the two primary satellite television providers. The SiriusXM merger was allowed and it created a sole satellite radio provider. It was a case of taking two struggling companies and combining them so as one they could survive. I don't believe either DirecTV or DISH need to merge with each other to survive ... and I wish they would stop entertaining the idea.
It used to be we could dismiss the annual merger rumors that have come every year since 2002. But when CEOs are saying "never say never" it deserves some discussion.
By the way Sirius XM has 19 million PAYING subscribers
Year end report 2012.
There are at least 50 million vehicles on the road with Sirius or XM radios builtin (according to the Sirius XM annual report and 10k). Add in another 20 million or so stand alone radios sold over the last decade and there are 70 million radios but only 20 million active subscriptions. If you've ever tried to cancel a subscription with Sirius/XM you'll wonder how many of those 20 million are even being used. (Sirius/XM customer service is among the worst I have ever dealt with).
In any event, what I actually was referring to with the "staying away in droves" comment was the dual service radios. Other than the MLB play by play coverage, I'm not sure what you can get on a XM radio that you can't get on a Sirius radio and since the majority of subscriptions are for vehicles with Sirius only radios, the uptake on the hybrid radios is quite small.
And if you want to compare companies, look at market capitalization. Sirius/XM has a market cap of $24B as of Friday...DirecTV's market cap is $34B and Dish Network's is $20B. This is what the market says each company is worth.
And for a preview of what a Dish/DirecTV merger would mean for subscribers, an annual SiriusXM subscription today costs between $150 and $200 (list price) which is between 50 and 100 percent more than the pre-merger cost (depending on the pre-merger service and package being compared).
Diana C, you bring up an important difference between the Sirius/XM merger and a hypothetical Dish/Directv merger. All those vehicles that have XM only or Sirius only receivers built in. Sirius/XM didn't have any real choice but to leave both systems in both, because there isn't any practical way to convert XM only vehicles to Sirius or vice versa. Given the average life of a vehicle, there will be many pre-merger cars on the roads for years to come, so if they switched off one of the two systems they'd lose many current customers, and far far more potential customers.
The concerns for a Directv/Dish merger are somewhat different. There is no "potential customer" base with built-ins to be concerned about, since the only built-in some new customers have is an existing dish. Most of the acquisition cost for new customers is not the dish and its installation, but the free receivers and free/discounted programming. If a merged company decided to use Directv technology going forward, a new customer with an old Dish Network dish would still get a Directv install, whereas a new Sirius XM customer with a Sirius radio pre-installed must get Sirius service. There's no way they could eat the hundreds of dollars to retrofit it unless they could sign the customer up to a very lengthy contract to make it worth it.
The existing Dish Network customer base would still be a big concern, and very expensive to migrate. However, I believe those using the "new customer acquisition cost" as the figure to convert them are on the wrong track. Certainly they get a new dish and new receivers, and that costs a lot of money, but unless they're going to be given all the discounts, free NFLST and so on that new customers get (which would piss off pre-merger Directv customers) it might only cost half the figure being thrown around. That still adds up a few billion dollars, so it would just be a matter of whether the savings in doing so (selling off or re-purposing the Dish Network satellites/bands) allows them to come out ahead.
SiriusXM probably should have done more to split the services and not duplicate so much on XM. This many years after the merger why are they selling anything other than dual service radios? They should have stopped selling single service radios as soon as they could after the merger ... then they could use one service's bandwidth to compliment the other. Every new Sirius only or XM only radio they sell is just another roadblock to a combined service.
Hopefully DISH and DirecTV would not make that mistake. There would be years that they would need to continue to support DBS and DSS transmissions but hopefully a combined company would cut the cord on any equipment that was not MPEG4 compatible. It is something both companies need to do even if they don't merge: stop placing obsolete equipment!
The last four or five cars I bought have come with Sirius. No mention of XM, no fliers received on that. So, one way to get everyone on one system is to promote, produce and install just one of the systems. From my tiny data point, that's what they are doing.
The Prius I bought last summer and the one I bought in 2010 both came with XM only. The one my father bought in December was also XM only. Therefore I don't think you can say they're pushing Sirius all that hard.
Well, all righty, then! Puts my theory waaaaay out there in Left Field.
I've never had a real issue with the gran I had it, though thud activation process was bizarre! had a three minute window to have the car on. But they certainly keep sending me offers to cone back.
Yer don't hasta rub it in!!
I think Sirius and XM still have specific contracts in place for each brand seperatly, and ill bet they cant renegotiate and get as good a terms, so they are leavening it as is.
You're right. Here's the link to which auto manufacturers offer which service:
Update: Dish-DirecTV Merger 'Makes A Lot Of Sense,' Says Ergen
DirecTV’s CEO may believe regulators would never allow a merger of the two big American satellite TV companies, but Charlie Ergen’s ardor for such a deal remains undimmed.
“There’s obviously a business case that [consolidation] makes a lot of sense in the satellite industry,” Ergen, the billionaire chairman and founder of Dish Network, said on the company’s third-quarter earnings call. “Whether it ever comes to fruition is another story. But both Dish and DirecTV realize that it could make a lot of sense.”
Full Story Here
A DirecTV/DISH merger has a lot more hurdles to overcome than satellite radio or US Airways and American Airlines.
USAir and AA had to give up significant slots at airports where they had 80% share (like DCA). That increases competition for those routes. There's no way to increase competition in the satellite industry, unless the FCC requires that they give up some of their licenses. Even then, that doesn't guarantee new competition because the barrier to entry is significant. To realistically ensure another party could enter the market would require that a combined DirecTV/DISH also give up physical assets at a reasonable cost, like hardware on orbit and ground stations. Even though USAir/AA will be the biggest carrier, they still have significant competition. In many areas of the country, Dish and DirecTV are the only two MVPDs available.
Sirius/XM also were in a situation where they have other competition. They have FM, AM, iPods, Spotify, Pandora, CDs, Music Choice/Sonic Tap/DMX all competing with them. Combining Sirius and XM did not meaningfully reduce the number of options available in the music market, even if you take out internet based solutions. There is not such a robust marketplace in the video market at this time, even if you consider Netflix and Hulu, since in most of the areas where DirecTV and Dish are the only options, internet access is likely insufficient for an IP-based over the top provider to be viable.
After reading this whole thread (and the Sirius/XM subthread :sure: ) I was thinking when I was reading Stuarts Post What if the merger did happen, but the hardware changeover started with 4k distribution? Essentially DirecTV and Dish say we run parallel until everyone is switched over to 4k? Long term plan of 2020 conversion?
Of course the merger makes sense in Charlies eyes,
He's the one who desperately needs it.
To make it work economically, they'd essentially have to pick one existing platform or the other and standardize on it. That's what SiriusXM is doing. While you can still buy Sirius radios, over the next year everything will be on the "XM 2.0" platform which is essentially standardizing on the XM platform and then letting Sirius shut down through attrition.
For it to be economical on a DirecTV/Dish system, it would need to work on one of the two systems now. They don't have the capacity to broadcast in triplicate. Given that DirecTV has significantly more subscribers, it would make sense that they'd standardize there. That means every DISH customer would need to have every box and dish swapped out.
However, a complication comes into play that makes it not so simple: What would they do with all of the orbital slots they have? Would they continue the WA/EA paradigm that they have now? With their combined licenses at 99/101/103/110/119, they could standardize on that arc of satellites but doing that would essentially waste 129, 61.5, 72, and 77 (though, I suppose 129 is close enough maybe they could squeeze that into a 99-thru-129 dish?) If they went with a nationwide 99-119 or 99-129 arc, they could just swap out all DISH customers for DirecTV equipment, giving them the latest and greatest hardware and dish, and then pick off DirecTV customers with the new "bigger" dish much more slowly.
I said it once and I'll say it again.
Dish will be gone if a merger happens.
Charlie will get a Big check, Directv will gain 13 million customers.
Just the same as PrimeStar take over.