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  ) moved lower this week, closing 2.3% lower to hit $3.01. The general market moved lower, and Sirius XM's dip wasn't as bad as the Nasdaq's 2.7% tumble.

There was more going on beyond the share-price gyrations, though. Sirius XM officially announced the open availability of MySXM. Zacks upgraded the shares to a still uninspiring "neutral" rating. And after weeks of hype, Twitter introduced its music discovery platform.

Let's take a closer look.

MySXM marks the spot
Sirius XM is a few months late on its promise to deliver personalized radio by the end of last year, but MySXM is now out of beta and readily available.

Pandora's (NYSE: P  ) success with personalized radio is well documented. The fast-growing music discovery platform announced earlier this month that it has surpassed 200 million cumulative registrations -- and more than a third of them tuned in to consume 1.49 billion hours of content last month.

MySXM is Sirius XM's response. Subscribers can fine-tune dozens of Sirius XM music channels, selecting as many as 100 variations on the already deep genre dive. It's a unique approach, and there's plenty riding on the platform if it's successful.

MySXM isn't included with the standalone receiver-based subscription, but those who are already subscribers only have to pay $3.50 a month for Internet access that includes mobile streaming, on-demand content, and now MySXM.

It's a retention tool, and it could be important if it helps boost conversion rates and lower churn.

Jumping Zacks
Zacks Equity Research moved to upgrade the satellite-radio giant ahead of its quarterly report later this month.

It isn't fair to call the move bullish. Zacks is merely boosting its rating to "neutral." However, it's also fair to say that the analysts at Zacks don't want to be seen as bearish when the financials do come out on April 30.

"We expect the company's positive momentum with respect to revenue, margins, and free cash flow to continue in the near term," reads the press release announcing the move.

Zacks isn't entirely sold on Sirius XM. It points to a new deal with General Motors (NYSE: GM  ) -- an early investor and satellite-radio installer -- as potentially problematic. The new arrangement calls for the end of GM's payment of promotional money to Sirius XM, a move that Zacks concludes will force Sirius XM to miss out on some paid promotion subscribers.

Zacks is also concerned about Liberty Media's (NASDAQ: LMCA  ) completion of its move to take majority control of the company earlier this year.

"We do not know whether there will be any change in management policy after the takeover," the release reads. However, it's still telling that Zacks times the upgrade less than two weeks before Sirius XM's next quarterly report.

Tweet your tune
After weeks, if not months, of hype, Twitter #music went live to the masses. On the surface, it's pretty basic. It's just a platform -- available on desktop, but also via mobile apps -- that scours Twitter to surface the songs and emerging artists that users are talking about.

It's more of an attack on Billboard's music charts than a threat to Pandora, Spotify, or even Sirius XM. However, it's also a tool that musical artists can use to more effectively promote their own material and the stuff that they happen to be listening to these days. It will increase the stickiness of Twitter, and that will be great for Twitter itself.

Sirius XM, on the other hand, has little to worry about here -- for now.

A Sirius future
Even though Sirius XM has been one of the market's biggest winners since bottoming out four 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.



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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 21, 2013, at 4:56 AM, JesseNash wrote:

    Zacks is a joke. 8 days earlier they downgraded the stock then they decide they should upgrade? What changed in 8 days? Maybe they just haven't a clue wht they're talking about?

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Related Tickers

11/28/2014 12:59 PM
SIRI $3.63 Up +0.03 +0.83%
Sirius XM Radio CAPS Rating: ***
GM $33.43 Up +1.36 +4.24%
General Motors CAPS Rating: ***
P $19.66 Down -0.02 -0.10%
Pandora Media CAPS Rating: *

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