As expected, XM posted a decent Q2 this morning: The satellite radio broadcaster posted $318 million in revenue, up 15% year-over-year and about $5 million shy of the Street’s anticipated $323.2 million. And XM’s loss was less than expected — it lost 38 cents per share, versus the 41 cents per share loss Wall Street had estimated.
And we already knew XM had a decent quarter attracting new customers, because it told us yesterday: XM’s customer base increased 17% year-over-year to more than 9.6 million. Solid, even though most of those new customers just happened to be buying new cars with XM pre-installed.
Fine for now. But XM’s (XMSR) future is still mostly based on the assumption that it will be able to merge with its rival, Sirius (SIRI), a merger that’s been held up by an absurdly long FCC review process. And according to the Motley Fool’s Rick Munarriz, the FCC’s not making it any easier.
The 17-month courtship got some pro-merger news on Friday, when it was reported that another FCC member — Jonathan Adelstein — is on board. Unfortunately for the satellite-radio providers, Adelstein’s proposed concessions go even deeper than what [FCC chair Kevin] Martin wants.
Adelstein is looking to freeze subscription rates for six years, with 25% of the channels earmarked for public-interest programming. He also stipulates that any subsidized receivers must also allow for the open reception of HD radio.
This is getting ridiculous. If this is what it takes to get hitched, I have just one word of advice for Sirius: Run!
Rick’s right — this is ridiculous. What are we going to do with 25% of channels serving up public-interest programming?
Moreover, Do the FCC commissioners not see the same lines we see (and wait in) to buy Apple (AAPL) iPhones? Have they not checked out the app store, which includes not one, but at least three free, streaming radio services? (Plus an iPod!) Do they not realise that satellite radio is losing any technical advantage it has every day and that these two cash-burning companies need each other to survive? We guess not.
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