Sirius and XM are both losing cash, fast. So, they’ve proposed a merger to cut costs, but that has to be endorsed by regulators. That’s because the FCC, among others, view the idea of the nation’s only two satellite radio companies merging as potentially anti-competitive. Of course this would be true if Sirius and XM only competed with one another, but clearly consumers have many other options—iPods, MP3 players, terrestrial radio, CDs, live concerts, and streaming internet radio—so Sirius and XM represent just another delivery method in the larger market of music distribution.
If that wasn’t argument enough for you, yet another competitor is entering into the fray. Boing-Boing reports on Slacker, a Wi-Fi/Satellite hybrid that will combine streaming radio features from the internet, including skipping tracks, with iPod-like features. Slacker also features a huge color display that looks like it will put the iPod to shame.
The fact that Boing-Boing and other technophiles see this as potential competition for both satellite radio and portable MP3 players illustrates that markets cannot be compartmentalized. No matter how hard bureaucrats try to narrowly define them, markets are constantly changing and shifting their area of effect.
The shfting nature of the PC market is a perfect example of this. Personal computers became popular largely because of spreadsheets (the first “killer-app”), so they began by competing in the field of accounting. Soon after, computers were competing with Parker Brothers and Milton Bradley by producing games, the internet saw competition spread to newspapers and magazine, and today the popularlity of broadband has brought the PC head to head with TV.
While Slacker could give the Apple’s iPod and Sirius/XM radio a run for their money, it could also be declared a monopoly itself. After all, what other company will be in the streaming music over Wi-Fi and satellite business?