Report States Flaws with Carmel/NAB View of Satellite Radio Landscape

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Report States Flaws with Carmel/NAB View of Satellite Radio Landscape

Apr 12, 2007 4:45 AM

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Menlo Park, CA - Apr 10, 2007 - Telecom, Media and Finance Associates (TMF) released a research note on the competitive landscape for satellite radio in light of the proposed XM/Sirius merger. The research analyzes the positions taken by the Carmel Group in its recent white paper on behalf of the National Association of Broadcasters and concludes that Carmel "ludicrously overstates the case for opposing the merger of XM and Sirius and fundamentally misinterprets the competitive environment for satellite radio."

"Satellite radio is essentially a car-based audio service at present, so the primary alternative for consumers is free-to-air AM and FM radio, supplemented by the playback of pre-recorded music such as CDs," said Tim Farrar, author of the TMF report. "The competitive position of these subscription-free services vis-a-vis satellite radio has been substantially enhanced by the widespread use of accessory adapters, allowing...MP3 players to be connected to car stereos, and we estimate that today as many drivers have access to MP3 content in their vehicles as subscribe to satellite radio. Carmel Group's assertion that MP3 players are not even relevant to today's in-car audio market is quite simply bizarre."

Access the entire report at The report was produced independently, and was not commissioned, funded or instigated by XM, Sirius or any other party.

Radio magazine observation: It's obvious that if the only two satellite radio providers were to merge that one company would result. This, as the NAB states, would create a single source for this one form of entertainment in a narrowly defined space. It seems odd that the NAB will completely ignore satellite radio as being any kind of a threat to terrestrial radio, yet it will vigorously oppose the merger as being unfair to other forms of media with which the NAB believes satellite radio does not compete.