The long-awaited merger of satellite radio’s two players has finally been approved by the FCC. As an early subscriber to XM who converted to Sirius, I am pleased that, soon, I will be able to reap the benefits of their combined programing.
Here in real estate, the merger should serve as a breadcrumb left on the path of logic and forward thinking.
Why the merger makes sense
Other than slight differences in individual programs (comedy, music, talk, etc.,) both XM and Sirius are seemingly duplicate models performing duplicate functions vying for the same consumer.
Each company employs staff performing similar functions. Since both entities are not yet profitable, merging will dramatically reduce these redundancies, which would, if allowed to fester, bring about their ruin.
The merger creates one incredibly strong entity from two struggling companies with less than 5% market share fighting each other to the death.
What this means for real estate
This is almost too obvious. M&A activity has dropped off the table in real estate, but does that make sense? Is not a down market the best time to combined staff, mingle offerings, and shore up financials?
I think there’s a valid argument here. I’ve spoken at association meetings and wondered out loud why one association with no technology but a core education competency isn’t partnering with a neighboring association with great technology but vulnerabilities in administration or education.
Sirius XM
This is the name of the new entity. To me, it’s genius. Both names own market share. Both names are well known to satellite users. XM is a channel on Ford radios and Sirius is branded on Mercedes. Why create a new name and make customers feel expired?
I think real estate could take a chapter out of this book. What do you think?
- Davison
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I read this and it made me think – Why do we have so many MLS's doing the same thing from one county/city to the next. It makes absolutely no sense! For my company to have IDX on our corporate website and cover all the MLS's we need, we have to be part of 18 different MLS's – This equates to over 7k a year in MLS renewal fees, not including the costs the MLS's charge us to have IDX and then we also have to pay the IDX vendor. It’s well over 10k per year by the time you add everything up, and for WHAT? The best part is the huge key chain of MLS keycards that we have in our office… it’s the ongoing joke in our company. Our executive team laughs at every staff meeting when we bring it in. I’m now taking it out on the road with me to try and prove my point” even though I know it’s a waste of time. Sorry, had to vent – but you stuck a cord”
I can't say that I have to be a part of numerous MLS', but that doesn't mean I am any less frustrated. I am in the process of changing firms for the first time, and just found out that my MLS forces me to change the IDX on my website. Actually, the MLS forces me to use the IDX used my new brokerage, regardless of how outdated I think it is. By the way…what about a state or national MLS. Just a thought.
The MLS has issues. They aren't perfect. But neither is the brokerage. Or anything.
What inspires me from this merger is how combating entities decided to end the bickering and unite to fight the bigger enemy – terrestrial radio.
To me that's the message. XM and Sirius fought the FCC for over a year to make this happen. But they worked together to do it.
In both your cases, amass other brokers with similar issues and merge in solidarity and even if it takes a year and influence change. Can hundreds of brokers be able to change one or two MLSs?
If 2 little radio stations changed the minds of the FCC, anything can happen.
The past (and in some cases current) real estate models have always been flawed be it the MLS systems or companies. Some day we're going to figure out as Realtors that we are not about proprietary information but expertise and service and the ability to actually USE the information to benefit our customers. The MLS systems need to understand it's not their imformation but how they present and disseminate it that makes them unique. Heaven forbid my local board figure that out. They still think that having unbranded virtual tours means the consumer can't find out who has the property listed (blasphemy!).
I couldn't agree more. Merging two entitites, one with a weakness that the other one is strong in and vice versa is smart business practice. I wonder if two or perhaps three "smaller" real estate companies couldn't merge and really give consumers a choice and good run for their money??? Something to ponder as our small real estate boutique considers it's future!
A merge surely could be one answer to vastly reduce operational costs – from the IT department across all technology as well as savings in retail space, management, etc.
But giving consumers a choice and a run for their money is not necessarily a given bi-product. That still requires a major overhaul of the mindset of the new company, who its agents and how consistent the delivery of services are across the entire model.