As the proposed merger between Sirius and XM grinds its way through the wheels of government, one has to wonder if it's really worth it. 24/7 Wall St.'s permabear Douglas McIntyre thinks not.
Over the year-and-a-half that the merger has been pending, the two companies have gone from being in bad financial share to being in a dire set of circumstance. Each company has well in excess of $1 billion in debt. Neither has ever made a dime and their losses last quarter were not encouraging.
Satellite radio has lost much of its appeal for consumers. The slowing subscription growth rates at the two companies show that. HD radio and the Apple (AAPL) iPod, which can be plugged into a car sound system, have taken away much of the uniqueness of getting music, Howard Stern, and Oprah off the big bird in the sky
The merger may go through. It may be killed. Either way, satellite radio has a dim and perilous future.
I'm in favor of seeing the putative merger die, if only because a united XM/Sirius would pose a humongous hassle for AV hardware manufacturers.
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