I did a double-take. Competition costly? Didn't the NYT's top mergers & acquisitions reporter take intro to economics at some point? Hadn't he heard that competition makes prices go down, while monopoly makes prices go up?
(Apparently, I'm not the only one who did a double-take. When I first started writing this blog entry, the article was titled: "A Proposed Merger Would End Satellite Radio’s Costly Rivalry", but an hour later had been changed, taking the word "coslty" out. )
Then, when I read the article, I realized that the cost he was talking about wasn't for consumers, but for the businesses in question, who had been forced to compete with each other, which was costing THEM money. After all it's they and their investors who are reading the NYT, right? Perhaps when you consider it from this point of view, it made sense that the only views quoted at any length in the article were the owners and lawyers of the companies involved. Don't worry, the companies say, this won't reduce choice for listeners.
The companies said yesterday that their $13 billion merger — called Project Big Sky by MX — would give consumers a broader range of programming, while eliminating overlapping stations that focus on genres of music. At the same time, they said, they could cut duplicated costs in sales and marketing
Let's take this logic further. Think of how such mergers might eliminate so many advertising, sales and marketing costs for ANY companies in competition with each other. The Gap, Nike and other big clothing companies could save so much money if they didn't have to pay competitive prices to the celebrities who market their sneakers and pants...What if, instead of each company buying different ads, they could pool their resources and just pay for ONE big ad? Isn't a merger really sort of like when two friends from college move in together to split such expenses as the phone and tequila bills?
The only voice in disagreement with the merger in the article is mentioned, not quoted at length, and no one responds critically to the bizarre economic "arguments" cited above. For example, The National Association of Broadcasters is the only named one of a group of "critics" who are "lining up." Instead of discussing actual critiques of media consolidation, such as the results of Benton Foundation, which asks, "Does Bigger Media Equal Better Media" and responds in the negative, the paper suggests quotes a flippant remark about Howard Stern as the main reason for not granting a monopoly to Sirius.
It is notable that the main critic of the satellite network is a much bigger radio competitor. While the Sirius/XM merger is disturbing, the bigger concern when it comes to media consolidation is still the very people who are opposed to the merger: broadcasters like the Clear Channel. Satellite radio, even if these two companies were to merge, will still be relatively small in comparison. Thus, the spin has an extra "english," suggesting that these two companies are underdogs, who need to need to combine in order to successfully compete with the really big dog media monopoly broadcasters, who do make it hard for them to operate.
I was actually beginning to find this persuasive until I looked at this side-to-side comparison of the two radios and checked their huge lists of corporate partners along with thre preponderance of corporate media shows in their talk programming....not to mention the bio of Sirius CEO, the former #2 at Viacom, Mel Karmazin.
As ARomeo puts it on his world music central", while satellite radio has provided an alternative to big corporate broadcasters, it is not as independent as college or local radio stations because corproate "gatekeepers" are ultimately in charge of the programming on the satellite stations.
It's hard not to see this "cost-saving" merger as setting a very bad precedent for the future of American media.
* spelling problems explained here: Some of you have noticed that from time to time I miss typos in my blog. Here's why. Ever since the ethernet card gave out on my desktop computer, I've been writing everything on a rather small laptop. Sometimes I just don't see what's on the screen very well. sigh. Thanks for catching the slips and tipping me off.