Dueling Fools: Sirius/XM Bull [Fool.com] March 01, 2007

Dueling Fools: Sirius/XM Bull [Fool.com] March 01, 2007:

Meanwhile, in radio, terrestrial stations managed by the likes of Clear Channel (NYSE: CCU) are suffering. That's not entirely Sirius and XM's fault; more of the blame should be sent Google's way. After all, Big Goo is leading a digital-advertising revolution. Its online pitches are pulling dollars away from ad-supported radio, according to research from eMarketer.

If that's true -- and I've no reason to believe it isn't -- then nixing a deal between Sirius and XM on competitive grounds could be like feeding beer to a sick cow. Sure, it might look interesting, and given enough brew, it might even dull the pain. But the cow is still going to die. Terrestrial radio, too. Or at least the terrestrial radio that we know and (mostly) love today.

Tuning in to the real competition

Which brings me back to the Web. Online radio is a booming business that now boasts some 65 million listeners -- 65 million! That number will likely grow, thanks to the relative ease of streaming radio over a Web connection. In most cases, a simple MP3 file will allow you to listen to broadcasts from around the globe.

My MacBook Pro offers a reasonable example. My snooty taste is varied, but thanks to a few quick downloads, I get classical public radio here in Colorado and from Washington, D.C. And thanks to a handy widget in the Mac OS Dashboard, I'm also able to stream the BBC.

Therein lies the problem for Sirius and XM, which together would have just 14 million subscribers. With all of the special equipment required, it's a lot harder to become a satellite-radio subscriber than it is to get radio over the Web, or on FM.

Well said. I actually listen to the radio ... once in a great while. "Once in a great while" isn't going to cut it financially for the radio business. The same will happen to TV - just a few years later.

Imagine ... if Howard Stern was signed up by Google after his deal with Sirius expires ...