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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 2.3% lower to hit $3.01. The general market moved lower, but it didn't take as big a hit.

There was more going on beyond the share-price gyrations, though. Sirius XM emerged victorious, again, in its battle with Howard Stern. There was a small shakeup in the media giant's boardroom. The company struck a deal with Kia to get more buyers of used cars connected. On the streaming music front, Pandora (NYSE: P  ) crossed a major milestone in registrations, and a report claims that Apple (NASDAQ: AAPL  ) could now be days away from announcing its first streaming licensing deal.

Let's take a closer look.

Stern decision
Sirius XM dodged a $330 million bullet this week, when a state appeals court decided to stand by a trial judge's original ruling in dismissing a case that pitted Stern's production company against the satellite-radio provider.

Stern argues that his original contract calls for bonuses based on the number of subscribers Sirius lands. The argument from Stern's perspective is that he's eligible for $330 million from the XM subscribers who joined forces with Sirius during the 2008 merger.

He didn't have much of a shot, especially since XM subscribers don't have access to Stern's show on the basic plan. However, one can always argue that Sirius wouldn't have been the master architect of the merger if it didn't have Stern.

Either way, shareholders can once again breathe easily in knowing that Sirius XM -- for now -- won't have to shell out on that $330 million claim.

Shake it up
Liberty Media
(NASDAQ: LMCA  ) is doing some more boardroom touchup work. Liberty Media CEO Greg Maffei is now taking over as Sirius XM's chairman.

Liberty Media master architect John Malone and his general counsel executive, Charles Tanabe, won't go up for board renewal during next month's annual shareholder meeting. Evan Malone -- John's son -- and Discovery Communications CEO David Zaslav will take their place.

The moves aren't earth-shattering. Liberty Media runs this town now.

In the key of Kia
Sirius XM continues to build out its arsenal of major car dealers working to push satellite-radio subscriptions to buyers of used cars. Kia became the latest addition to the Sirius XM Pre-Owned Vehicle Program, in which buyers of secondhand cars with satellite receivers get three free months of the service. Sirius XM's CFO recently said used-car buyers convert at the same rate as new-auto buyers do, so this a smart way to nab new subscribers without the initial investment of a Sirius or XM receiver.

Panning for Pandora
Pandora announced that it has surpassed 200 million registrations. That's an impressive number, though it's not as important as the number of people actually using the music-discovery service. Looking at it that way, Pandora had a still-impressive 69.5 million members use the service last month.

It's important for Pandora to remind everyone how far it's come, especially as the marketplace is about to get pretty crowded. The Verge is reporting that Apple is in final negotiations with the largest record label on a licensing deal for streaming rights. The deal with Universal Music Group could be done as early as next week.

It remains to be seen what kind of impact Apple would have here. Yes, it's the biggest retailer of music, but would the company try to take on the premium-on-demand Spotify model, the premium-content angle that Sirius XM is trying to get off the ground as a Web-based offering, or the popular yet not profitable Pandora music-discovery format

A Sirius future
Even though Sirius XM has been one of the market's biggest winners since bottoming out three years ago, there's 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.

Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2013, at 8:49 AM, JesseNash wrote:

    BIG TYPO: Not $3.01, $3.08. BIG DIFFERENCE. And you are so wrong about the share price this week. It closed last Friday at $3.01. This week the share price WENT UP. It traded between $3 and $3.20, closing yesterday at $3.08. get your freaking facts right before you write some b.s. news story that is erroneous.

  • Report this Comment On April 13, 2013, at 8:51 AM, JesseNash wrote:

    Re: Howard Stern. You say "SIRI shareholders can breathe easy FOR NOW?" Excuse me? The appeal was thrown out of court. The $330 million is no longer a threat. So why add the words "for now?"

  • Report this Comment On April 13, 2013, at 8:55 AM, JesseNash wrote:

    Re: Pandora. You tout like many other writers and analysts that Pandora just passed their 200 millionth subscriber. Come on man! So mny of those "subscribers" are the same person with 6 or 7 accounts or are outright bogus accounts. But that doesn't even more the needle. 200 million subscribers and Pandora's business model finds it practically impossible to turn a profit? None of you writers or analysts tout this. PR is pr. In this case it's obvious that Pandora's marketing team are trying to deflect from the truth: that the company can't even sustain a profit even with 200 subscribers? If this doesn't confirm that their business doesn't work, I don't know what does. Of course, you won't write that. Only a few do and they do it only casually.

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