Less Competition Can Be Good

There is an article by James Surowiecki about the Sirius/XM satellite radio merger in the current issue of The New Yorker.

He points out how reducing competition is usually bad for consumers, but in this case,

“Many consumers have hesitated to subscribe to satellite because they didn’t know which company would survive. And desirable content is split between the companies: if you want major-league baseball and Bob Edwards, you need XM, but if you want N.F.L. games and Howard Stern, you need Sirius. Allowing Sirius and XM to merge would eliminate this problem in one stroke.”

This sounds suspiciously like the Blu-Ray/HD-DVD issue we are all facing. Consumers are holding back because there is no clear winner in this battle, and for the average viewer neither format offers significant improvements over a good quality standard definition DVD.

If the Sirius/XM merger is approved and satellite radio booms because of it, the HD disc camps should think long and hard about what they can both gain by putting aside their differences.

Both camps missed their chance at a merger a few years ago. As more and more titles trickle into the field and penetration slowly builds, it will be harder and harder to find any middle ground. In fact, we may very well be past that point already.

There is so much money and pride involved that at this stage our best result is probably going to be dual-format players and/or dual-format discs.