One of the great things about intrade (recently split from TradeSports) is that they are open to suggestions from wide-eyed academics. For example, at Justin and Eric’s urging, intrade listed several simple combinatorial markets, including baskets of states (e.g., “FL+OH”) in the 2004 US Presidential election and an October surprise market probing for a statistical correlation between Bush’s 2004 reelection and bin Laden’s capture.
Recently, again at Eric and Justin’s request, intrade launched a Sirius-XM merger market to predict whether the two satellite radio companies’ wedding vows will be blessed by the U.S. Department of Justice and the Federal Communications Commission.
The picture of XiriuM as a powerful monopoly threatening consumer choice is, to put it bluntly, laughable.
why would I pay for satellite programming when I can simply hop onto Internet radio?
If the DOJ nixes this merger, it can be due only to a horrible misunderstanding of the march of communications technology. One by one, nearly every communications medium is converging to operate “over IP”: data, voice, music, print, TV, video, you name it. Audio in your car should be no exception. Does anyone doubt that sooner rather than later every car (indeed every person) will be connected to the Internet? Then why would I pay extra (a good deal extra if the naysayers are to be believed) for one-size-fits-all satellite programming when I can simply hop on the Internet and tap into my personalized
Lauchcast radio or my
iTunes account? Orbital space machinery must weigh a little more heavily on the balance sheet than rack space in Quincy: how will XiriuM possibly compete once Internet radio has equal access into consumers’ cars?
The problem I see for XiriuM is that one-way purely broadcast technologies are nearing extinction. Even if some media don’t directly utilize the Internet or even TCP/IP, they will almost surely use a two-way communications link of some kind. Why? Ostensibly, because consumers want personalization and interactivity. Perhaps more to the point, because publishers and advertisers want better targeting and performance metrics.
The only “way out” I see for XiriuM is to actually become an Internet service provider for cars, much like the (formerly broadcast-only) cable companies did, for example by bundling high speed satellite downloads with a low bandwidth cellular uplink. Even so, I imagine that latency would be a serious problem, as with HughesNet (formerly Direcway) satellite Internet service, meant for use in rural areas with no broadband alternatives.
So, although I have no idea how DOJ will rule, and thus have no advice for intrade bettors, I do know how DOJ should rule: “sure, knock yourselves out”. Plus I have some throw away advice for SIRI and XMSR shareholders:… Sell!
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Recently my daughter, nearing 2 1/2, was playing with an old laptop we keep in the family room. She was pressing keys and buttons to varied effect, her giggles contagious. Suddenly she called out, “I’m pushing email! I’m pushing email!” My wife & I couldn’t stop laughing. We had never explicitly taught her the word “email”, though she had clearly caught on to that thing that mommy does in the office every day or so.