NAB President/CEO David Rehr has sent a letter to John Conyers, Chairman of the House Judiciary Antitrust Task Force, outlining his concerns about the proposed satellite radio merger. The letter was also sent to the other members of the task force.
Rehr says that local broadcasters are not in competition with XM and Sirius, but the NAB is still opposed to the merger because the satcasters compete on a local level. He writes, “every person who listens to satellite radio is one person not listening to a local radio station, which affects a station’s ratings and, in turn, ad revenues. Competition between satellite and terrestrial radio is only one-way.”
Rehr adds that a merger satcaster would “be able to exercise monopoly control over its prices and programming.” He continues, “A combined XM-Sirius also will be able to offer money-losing products like a low-cost a la carte package of channels, or charge predatory advertising rates, and offset the lost revenue with the monopoly rents it can charge for its national, mobile radio services. The impact of these and similar monopolistic activities would be devastating for local broadcasters.”
He concludes that a merger between the two would “reverse FCC policy, violate both the 1996 Telecommunications Act and anti-trust principles, and reward bad actors for poor decision-making,” as well as just not make economic sense.
Satellite Radio Stats
If satellite radio giants, XM and Sirius get regulatory approval for their pending merger they will account for just under 3.5% of American radio listening, according to a fall 2006 survey by Arbitron.
This study, which was conducted in the the backdrop of ongoing merger rumors, marks the first time that satellite radio audiences have been quantified in comparison to the total radio audience. Around 5.6% of the survey’s respondents said they had listened to satellite radio at some time, which marks significant growth for the market as a whole.
There was some good news for the terrestrial broadcasting industry as well, however, in the finding that satellite listeners tend to be much more frequent users of radio in general. On average, they listen to 33 hours per week of programming, including 14 hours of AM/FM content, 10 hours and 45 minutes of satellite radio, and 8 hours and 15 minutes of internet audio.
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