Mel Karmazin, chief executive of Sirius, has touted the benefits of a merger with XM Satellite Radio for some months, and other Sirius officials have said a merger would be a good thing - but XM has not publicly commented on the possibility, writes the New York Times (via MediaBuyerPlanner). And neither company has said whether they have actually discussed the issue. 

With two companies in the same industry and a similar cost structure, a merger clearly makes sense from an investor's point of view, "to reduce costs, and to have a better return," David Frear, CFO for Sirius, is quoted as saying. The two services "mirror each other tremendously. More people know that one service has Howard Stern than know which one has him," according to Envisioneering Group analyst Richard Doherty.

Because of that, purchase decisions tend to be made based on ease of purchase rather than on programming, the article claims, and goes on to speculate that consumer choice will become even less of a factor as more new cars are sold with factory-installed satellite radios.

Both Sirius and XM lowered their 2006 subscriber level expectations, but XM president Nate Davis said the slower-than-expected growth rate was XM's doing - not a result of any softening of the market - because of its failure to stimulate the market with new products.

Sirius claims that 83 percent of consumers aged 18 to 55 are now aware of satellite radio.