Dust off those Tony Manero leisure suits and warm back up to hip-hop's original emcees. Sirius XM Radio (Nasdaq: SIRI ) is bringing back The Strobe and Backspin -- two of the many channels it axed in last month's questionable content consolidation.
This is naturally good news to fans of Strobe's classic disco playlist or Backspin's nod to old-school hip-hop artists. It shows that the company can take a hint, given the outcry over November's programming changes.
Unfortunately, it still leaves dozens of dead channels in their shallow graves. The move is also unlikely to appease XM listeners, as Sirius XM is once again showing a Sirius-leaning bent by reviving two former Sirius channels and not XM expirations. With slightly more XM subscribers than Sirius accounts in its fold, CEO Mel Karmazin can't afford to alienate more than half of his user base.
I get it. There is overlap in many of the XM and Sirius content offerings, and any reasonable synergy strategy involves eliminating redundancies. However, Sirius XM pays a flat percentage of its revenue for its access to music, so it's not as if offering more tunes will hit it outside of the incremental programming costs.
The rub for the company is that last month's move left voids. Even if it can justify the branding benefits and staffing cost savings of cloning Sirius and XM stations across both services, there are still customers who are smarting, if not outright canceling their subscriptions.
Some have suggested bringing back the dead channels as online channels. It's fair advice, though free Internet radio is already loaded with choices like Pandora, Live 365, Time Warner's (NYSE: TWX ) AOL Music, and CBS' (NYSE: CBS ) Last.fm.
It's still worth a shot, if financially feasible. It will help take some of the sting out of last month's surprise attack. Bringing back Strobe and Backspin next month is a good start, but the announcement leaves out fans of the channels that haven't been resuscitated. Is the company not listening to them? Are their niche genre preferences too obscure to be satisfied by satellite radio? It also draws an uncomfortable line between Sirius and XM legacies.
Since new memberships are coming primarily from auto sales these days, one might think that there isn't much of a "Sirius vs. XM" decision for consumers. If you buy a Ford (NYSE: F ) you're getting Sirius. Buy a General Motors (NYSE: GM ) car, and your factory-installed receiver will be an XM. Satellite radio is mostly forgotten in retail. This weekend's Best Buy (NYSE: BBY ) circular had just half a page devoted to satellite radio receivers. However, just because subscribers have become provider-agnostic doesn't mean that they won't miss what's taken away, or bellyache over the selection process of the stations that aren't getting a shot at redemption.
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