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This Week in Sirius XM Radio

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Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ: SIRI  ) moved lower this week, closing unchanged at $3.11. The major exchanges were also flattish on the week, so Sirius XM merely kept pace with Mr. Market.

There was more going on beyond the share-price gyrations, though. The week was light on Sirius XM-specific news, but there were a couple of stories that may shape the stock's price action in the near term. Streaming leader Pandora (NYSE: P  ) struck a deal with Microsoft (NASDAQ: MSFT  ) , and Liberty Media (NASDAQ: LMCA  ) acquired a sizable chunk of a cable television provider.

Let's take a closer look.

Pandora does Windows
Android and iOS are running away with the smartphone market, but you can't blame Microsoft for trying. Microsoft knows that app support is the key to giving Windows Phone 8 a shot, and it's been willing to crack open its billfold to strike deals with developers to make it happen.

To that end, an important partnership was announced this week, as Pandora's popular music-streaming app made its way to the Windows Phone market. But this is more than a mere app-availability announcement. Microsoft is sponsoring commercial-free access to Windows Phone users for the app for the rest of the year. In other words, Microsoft is footing the bill for this.

Commercial-free access to Pandora is a premium treat. Pandora charges $3.99 a month or $36 for a prepaid year for the Pandora One subscription that includes ad-free streams.

That would make things interesting if there were a lot of Windows Phone owners out there. After all, ad-free Pandora for free is a sweet deal compared with Spotify at $9.99 a month or Sirius XM at an additional $3.50 a month for existing receiver-based subscribers.

When you consider that nearly every dot-com giant has been rumored to be entering the streaming market at some point this year, it would seem to be a huge advantage for Pandora to have another company -- Mr. Softy, in this case -- sponsoring the freebie. With Android and iOS users limited to 40 hours of mobile a month with ads, Windows Phone wins this round for 2013.

But again, the problem is the very limited number of Windows Phone users out there.

Liberty Media gets hungry
As investors wonder what Liberty Media will do with Sirius XM now that it owns a controlling stake in the satellite-radio star, John Malone's media conglomerate is getting bigger. The company struck a deal this week to buy a roughly 27% stake in Charter Communications (NASDAQ: CHTR  ) for a little more than $2.6 billion.

Charter is the country's fourth largest cable provider, but it's a bit of a mess. Like most traditional cable companies, Charter is dealing with cord-cutters. Video customers fell below 4 million last year, inching down 4%. Revenue is growing marginally, but mostly as Charter jacks up its subscription rates and talks its customers into bundling their TV with telephone service and Internet connectivity. Charter is also still not profitable since emerging from bankruptcy, though Wall Street sees the cable provider turning that corner by next year.

Liberty Media naturally made a much better deal when it acquired 40% of Sirius XM four years ago for free. Well, not exactly free. Liberty Media did have to lend some money to Sirius XM at a stiff 15% interest rate. However, now that Sirius XM is healthy and growing its top and bottom lines, it remains to be seen what Liberty Media will do now that it owns a little more than 50% of Sirius XM.

Speculation that Liberty Media may buy out the rest of Sirius XM has never been a popular theory, but now it will seem less likely if Liberty Media is saving up to own more of Charter.

Sirius XM has had an interesting week without making any news itself.

Take a step closer to Sirius XM Radio
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 The Motley Fool's brand-new premium report. To get started, just click here now.

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9/29/2016 4:00 PM
SIRI $4.15 Down -0.02 -0.48%
Sirius XM Radio CAPS Rating: **
CHTR $271.83 Down -4.74 -1.71%
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MSFT $57.40 Down -0.63 -1.09%
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P $14.14 Down -0.27 -1.87%
Pandora Media CAPS Rating: **