According to a Marketwatch report this morning, Satellite company EchoStar, which owns Dish Network, is buying up Sirius XM debt, prompting speculation of a takeover. The report summarizes the severe negative impact that the poor economy, drastic drop in automotive sales, and competition from iPod and Internet radio as the difficulties that the newly merged Sirius XM faces. EchoStar would be looking for an additional revenue source to its existing satellite television product, and could enjoy some efficiencies by combining two satellite companies and sharing assets and operations.
A recent survey of consumers found that satellite radio was considered to be a luxury expense that was highly expendable – more than 90% of those asked said they would eliminate it along with high end handbags, housecleaning services and facials. The same survey found that 80% of those asked considered Internet service essential and would not cut it, and 60% said the same for cable television service.
As the future for satellite radio continues to look bleak, Internet radio appears to sitting safe and pretty, poised for audience and revenue growth in 2009.