This Week in Sirius XM Radio

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ: SIRI  ) hit a new four-year high this week. The stock traded as high as $3.25 on Friday before closing at $3.23.

There was more going on beyond the share price gyrations, too. The media giant raised the stakes in its long-standing partnership with Martha Stewart. A two-week free trial for all dormant receivers kicked in on Wednesday. Rival Pandora (NYSE: P  ) got clipped with an analyst downgrade.

Oh, and the company's gearing up to report quarterly earnings come Tuesday morning.

Let's take a closer look.

Martha, Martha, Martha
Sirius XM and Stewart go way back. Sirius struck a content deal with Martha Stewart Living Omnimedia (NYSE: MSO  ) in 2005 to get the diva of house crafts and home entertaining on the air. This was a deal with Sirius, years before the merger of the two satellite titans.

On Thursday, Sirius XM and Martha Stewart Living Omnimedia announced that Stewart herself will be hosting a daily two-hour show that will be exclusively on satellite radio. Martha Live will air at noon daily and be rebroadcast at night. Despite her eight-year relationship with satellite radio, this will be the first time Stewart actually hosts a daily radio show.

Stewart may not seem as relevant as a celebrity as she was several years ago, and revenue at her company has been slipping for years. However, Stewart's reach is still impressive. Martha Stewart Living Omnimedia reaches 66 million people across several media platforms every month, and it's a growing at the retail level, with 8,500 products sold through thousands of stores.

Satellite radio on trial
There are tens of millions of dormant satellite receivers out there, but Sirius XM turned them all on for a two-week trial on Wednesday. This isn't a new thing. Sirius XM has had these previews in the past. The practice dates back decades, to when premium movie channels would try to give prospective subscribers a taste of what they're missing.

It can also be effective. It doesn't cost Sirius XM anything to activate these previously useless receivers, and if it's just enough to win over a few new accounts, it will be incremental to the media giant's business.

Sirius XM appears to be going the extra mile this time, alerting current subscribers to tell their family members and friends who may not be aware that their dormant receivers are now flowing with commercial-free music and Sirius XM's other content.

Panned aura
Sirius XM and Pandora have each been able to thrive in growing their audiences in recent years, though satellite radio began treading on Pandora's turf when Sirius XM introduced MySXM in beta two weeks ago.

Sirius XM's personalized radio could be a game changer, especially for the service's current 23.9 million subscribers who won't flinch at paying an extra $3.50 a month on top of their receiver-based plans to be able to stream personalized radio across mobile devices.

Despite the threat posed by Sirius XM and the inevitable arrival of Apple's (NASDAQ: AAPL  ) own rival platform, shares of Pandora have been rolling. The stock is up nearly 60% since bottoming out in November.

Well, one analyst has seen enough. Wedbush Securities' Michael Pachter lowered his rating on Pandora from outperform to neutral this week. Yes, he did update his price target to $11.50 from $10, but Pandora's surprising rally had taken the shares higher than that at the time of his downgrade.

Pachter primarily fears the Apple threat and the unjustified recent gains in the stock. Yes, Apple will soon make a play for the streaming market. There are too many reports circulating that the consumer-tech behemoth is in talks with its iTunes label partners. Apple may wind up limiting the platform to iOS devices, or it may not offer a free ad-supported version, to match the way most of Pandora's 67.1 million active users engage with the service.

It won't matter at first. Apple's very presence may send shockwaves, and Pandora will feel the pinch.

Earn it on Tuesday
Finally, circle Tuesday on your calendar. Sirius XM steps up in the morning to discuss its holiday quarter.

Sure, the company already revealed strong subscriber growth during the quarter. It also initiated its guidance for 2013. So there won't likely be too many surprises in the report. However, this will be the company's first conference call in years during which Mel Karmazin is no longer CEO. Given its recent board shakeup, Liberty Media (NASDAQ: LMCA  ) will also probably have a more vocal presence.

And why not? Liberty Media finally acquired majority control of Sirius XM last month, and after spinning off its premium movie channel business, it has more at stake with the fate of satellite radio.

Tune in. Another interesting week is on the way.

Take Sirius XM to the next level
Even though Sirius XM is one of the market's biggest winners since bottoming out three years ago, there is still some healthy upside to be had if things go right for it -- and plenty of room for it to fall if things don't. Read all about Sirius in our brand-new premium report. To get started, just click here now.


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