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Sirius vs. XM


The Future of Satellite Radio
Sirius Stiletto 2
Ethan Miller/Getty Images
Sirius Satellite Radio unveiled its Stiletto 2 portable radio at the 2008 Consumer Electronics Show in Las Vegas, Nev.

After several years of rumors and speculation and more than a year of merger talks with the FCC, XM and Sirius became a single satellite radio company on July 25, 2008. But what happens after that?

The biggest questions on XM and Sirius listeners' minds are: Will the two services' equipment be compatible, and will I be able to hear one service even though I have the other? For right now, if you haven't done anything to your existing plan, the answers are mostly no -- a Sirius radio can only receive broadcasts from Sirius satellites, and XM radios can only receive broadcasts from XM satellites.

­To secure merger approval, the two companies had to agree to several conditions. Within nine months of the merger approval, they've promised to put on the market an interoperable device (a tuner that can receive both services). They've also put a three-year price cap on their monthly subscription fees -- both offer their basic packages for $12.95, with slightly more for a "best of" package -- and à la carte subscriptions that let customers pick from both services have become a major priority. In terms of technology development, neither XM nor Sirius is allowed to enter in any agreements that would give a third-party developer exclusive rights to make, market and sell equipment.

Despite these options for customers, the biggest impediment to satellite radio still remains the iPod and other personal music devices, which enable consumers to download and carry around thousands of songs anywhere they go. XM and Sirius have fought back by introducing their own personal satellite receivers, which receive the companies' broadcasts, can hold up to five hours worth of music and can play MP3 files.

Will satellite radio replace your favorite FM stations? Despite its growing popularity, that's not likely, say experts. Traditional radio still boasts more than 200 million listeners -- 50 times more than satellite radio's current subscription base. And although subscription rates have steadily increased over the years, the merger will actually put a significant hold on new membership, since many interested customers will simply wait for the newer interoperable devices to hit the market before committing to one type of radio or the other. In the end, odds are that satellite service will complement free radio, just as cable television now complements the broadcast networks.

For more information on Sirius, XM and related topics, check out the links on the next page.