Report: Satcaster, Label Mergers A Product Of Crowded Digital Arena
February 22, 2007 at 3:47 PM (PT)
With the XM-SIRIUS merger and a potential WARNER MUSIC GROUP-EMI pairing on the table, REUTERS reports today how "the urge to merge within both the recording and satellite radio industries reflects how tough it is to compete profitably within the evolving digital media market."
While both potential deals face regulatory hurdles, analysts and lawyers believe regulators may revise their views on antitrust concerns. Indeed, as ALL ACCESS reported yesterday, CONGRESS is jumping into the fray by announcing a task force will review the XM-SIRIUS combo at a hearing where SIRIUS CEO MEL KARMAZIN will testify (NET NEWS 2/21).
When the whole business is collapsing, the regulatory authorities tend to be more lenient in allowing mergers to happen ...
"In both cases [XM-SIRIUS and WMG-EMI], they're going to argue that technology has changed the landscape so much that their set of competitors are no longer confined to companies like themselves," said FORRESTER RESEARCH analyst JOSH BERNOFF. "They'll argue their mergers are part of a larger transition."
In fact, BERNOFF believes the regulatory climate could ease on the label side. "When the whole business is collapsing," he said, "the regulatory authorities tend to be more lenient in allowing mergers to happen, such as in the case of the railroads."
Read the whole article here.
Meanwhile, BUSINESSWEEK has an article entitled "The XM-SIRIUS Deal May Not Fly," in which it cites precendent for the deal's rejection. Check it out when you click here.