Slowdown Generates Static for XM, Sirius

While XM Satellite Radio Holdings and Sirius Satellite Radio await final regulatory approval of their proposed merger, the already difficult task of persuading consumers to pay for premium radio service could be growing tougher. When the merger was announced 15 months ago, some analysts were predicting higher growth rates for both companies. Since then, the companies have been in a holding pattern. The Justice Department signed off on the deal in March, but the Federal Communications Commission has yet to rule. During the long waiting period, things have changed for the worse. The nation's only two satellite services are growing slower than previously while the broader economy is in a slowdown. Fewer people have been buying new cars, which is where the companies derive the bulk of new subscribers. And as higher fuel and food costs take their toll, analysts worry consumers will quickly ditch discretionary services such as satellite radio.
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