Last night I was reading an interesting interview with Mel Karmazin, CEO of Sirius Satellite Radio, that was published in Smart Money magazine. I found it most striking that Karmazin is considering (and possibly heavily pushing for) a merge with XM Satellite radio. Jim Cramer from (and Mad Money on CNBC) seems to think that the window of opportunity for an XM buyout by Sirius is closing fast.

After seeing third quarter results from both companies earlier this month, it seems like a buyout of XM by Sirius doesn’t seem like the worst idea. Take a look at these numbers:

Sirius Satellite Radio

  • Revenue increase year over year: 150%
  • Change in subscriber acquisition cost year over year: -23%
  • Change in Net Loss year over year: -21%

XM Satellite Radio

  • Revenue increase year over year: 57%
  • Change in subscriber acquisition cost yar over year: 13%
  • Change in Net Loss year over year: -36% Bottom line: there is fierce competition between the two companies. A buyout by Sirius would eliminate all of it. The biggest accomplishment of Sirius is that they have topped XM satellite radio in new subscribers for four consecutive quarters. I definitely have seen an increase in Sirius subscribers in Washington, D.C. (the home of XM Satellite radio). My roommate just purchased Sirius recently, as well as a friend of a friend. I personally am not a subscriber, but fairly frequently I receive interference while listening to my ipod via an fm transmitter, and 9 times out of 10, I hear Howard Stern talking. This means two things: 1) Sirius has fairly powerful FM transmitters on their satellite radio adapters, and 2) my Monster Ipod FM transmitter does not work well in the metro area.

Following these two companies will definitely be exciting for the next couple years. Keep an eye out for a possible merger in the first quarter of next year.