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Sunday, November 16, 2008

Is Satellite Radio Now Losing Orbit?

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Until recently, XM radio stock was trading at over $8 a share while Sirius stock was under $2. XM also had millions more subscribers than Sirius by offering more commercial-free and unique radio channels than their competitor. Then came the merger. Last Wednesday (Nov 12th), both XM and Sirius subscribers got to listen to the new broadcast lineup. What did you think? I know I was sadly disappointed when several of my favorite stations were no longer available. Judging by blog posts across the Internet world, I'm not the only one who has discovered a loss of quality programming.

Usually in a business merger, the new resulting company strips away ineffective practices of its former entities and focuses on better ways to bring in their customers' money. I think that all listeners of the satellite radio realm knew that there would be a change in programming. What caught us by surprise is that the new XM-Sirius company canceled channels that had gained both business loyal customers in the past. In order to get quick cash from advertisers, XM-Sirius simply added more commercial filled, AM/FM type radio stations. Get for the short term but isn't that the customers who give longevity to a business?

So, are you surprised that "Canceling my subscription" filled most of the comments to blog posts about the new satellite radio company? Is it a coincidence that Sirius stock was around a quarter on Friday? It seems that instead of the merger being the best diet pill a company could take, XM-Sirius has ingested the best poison pill -- ignore what your customers want.

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