X
Tech

What's good for satellite radio isn't necessarily good for satellite TV - yet.

Now that the FCC has given its blessing to the merger of the nation's two satellite radio companies, it was only a matter of time before the question of a merger between their satellite TV cousins - DirecTV and DISH Network - popped up. Senior analyst Craig Moffett at Sanford C.
Written by Sam Diaz, Inactive
Now that the FCC has given its blessing to the merger of the nation's two satellite radio companies, it was only a matter of time before the question of a merger between their satellite TV cousins - DirecTV and DISH Network - popped up. Senior analyst Craig Moffett at Sanford C. Berstein says a merger of the satellite radio companies is not a precedent for satellite TV because the regulatory issues are "completely different."

He's absolutely right. They are different - largely because a merger of the two would take away choice in some parts of rural America where cable doesn't reach. That argument doesn't work for radio. But it was the main reason that a merger of DirecTV and DISH Network was rejected back in 2002 - despite the arguments that the cable giants were dominating the market. Since then, satellite TV has chewed away at cable's dominance and, thanks to new technologies such as HDTV and DVRs, as well as niche programming such as sports packages. And, new options, such as Verizon Fios (which had disappointing growth last quarter), are starting to pop up.

I agree with Moffett that now is not the time for Satellite TV to push for a merger. But the satellite radio merger took nearly 18 months to jump through regulatory hoops - and in Internet time, that's an eternity. XM and Sirius were able to make a case that things like iPods, HD Radio and old-fashioned terrestrial radio were all part of the competitive forces and that the two weren't just competing against each other.

What could the state of TV look like 18 months from now? There's already forces at work that could soon give the satellite TV guys the same argument. Portable devices like the iPhone and PlayStation Portable, the Internet and wireless technology (both the cell phone kind and the wi-fi kind) are on the verge of becoming major thorns in the sides of the cable and satellite companies.

Across the nation, television is still one of those forms of entertainment that's enjoyed on the set in the living room. But TV programming is starting to migrate to the Internet. That means, via the Web, it can be watched whenever, however and wherever, - after work on the home PC, on a smartphone's data network from the back of a cab or over a PlayStation Portable sitting under a tree on a Wi-Fi-blanketed college campus.

Even that argument about access in rural America will have less impact in the not-so-distant future. From rural Nebraska to Iowa, there are schools, libraries, coffee shops and even McDonalds that are making computers and/or WiFi available to anyone interested in logging on. And while that doesn't mean that the gents down at Joe's Bar in Anytown, USA are watching the fishing channel on a PSP instead of Sportscenter on a TV in the corner of the bar, it doesn't mean their grandsons won't be. If a better way to watch TV comes along, consumers will eventually gravitate toward it. Look no further than the growth of the DVR and High-Def TV to recognize that.
Editorial standards