This Week in Sirius XM Radio

Things never get dull for the country's lone satellite-radio provider, even if shares of Sirius XM Radio (NASDAQ: SIRI  ) went nowhere this week, closing unchanged at $3.70. The media darling's lazy ways make it seem like a slacker against the Nasdaq's 1.5% advance on the week.

Sirius XM also announced a new plan called Service Lane to activate dormant receivers. It renewed its deal with Major League Baseball. General Motors (NYSE: GM  ) announced that it will offer wireless charging mats in some of its cars next year. And Pandora (NYSE: P  ) also slipped after posting disappointing quarterly results and putting an end to its listening cap for free mobile users.

Let's take a closer look.

Life in the fast lane
More than half of the 50 million satellite-radio receivers out there are dormant, and Sirius XM wants to do something about it. The company this week announced Service Lane, a program in which participating dealers give drivers servicing their cars with dormant radios two-month trial subscriptions to the premium radio service. It's similar to the program in place for buyers of used cars to get free trials, with the one big difference being that folks getting work done on their cars have probably already tried the service or decided against it. 

Still, this is worth a shot. Every inactive receiver out there is an opportunity for incremental business.

Play ball
Sirius XM announced on Monday that it had extended its deal with Major League Baseball on XM through 2021. This one wasn't a surprise. What was baseball going to do?

Terms weren't disclosed, but one has to wonder whether Sirius XM got better terms because Sirius didn't have to be pitted against XM to drive up a rival offer. Then again, given the substantially larger audience being served these days, it's also possible that the contracted sum moved higher.

What we do know is that the stock closed lower the day the deal was announced, and even a bullish Lazard Capital analyst note praising the new baseball deal couldn't get the stock to first base.

All charged up
GM confirmed an announcement by Powermat earlier in the week that it will be the first automaker to begin adding Powermat's wireless charging systems to many of its cars next year. 

This is probably a bigger issue for Sirius XM shareholders than one may think, since bleeding smartphone batteries to stream Pandora, Spotify, or even iTunes in the car is often a selling point for satellite radio. Now drivers can just lay their phones over a mat and they'll charge without the need to fumble around for USB cables. 

Panned aura
The leading Internet radio provider stumbled after posting quarterly results this week. An important nugget for Sirius XM investors is that Pandora will be eliminating the 40-hour monthly cap it was placing on its free mobile users. That's a bit of a surprise, since it signals that Pandora is back to pandering to the users it was supposedly trying to transform into premium subscribers. 

Pandora's usage per listener and share of the radio listening market were starting to slip since the cap was introduced in February, but it's still a surprising move, when Pandora is trying to position itself as a platform worth paying for -- like Sirius XM, Spotify, and others. 

A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.

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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 August 25, 2013, at 4:08 AM, jazzopie wrote:

    "Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends General Motors and Pandora Media."

    "Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends iRobot, Netflix, and Tesla Motors and owns shares of GameStop, Netflix, and Tesla Motors."

    Enuf said --- I'm feeling a bit naive now, because I rejoined Motley Fool after a 5 year absence. And after a couple of months I have realized that they have become nothing but a bunch of "pumpers" for their investments and "naysayers" for the competition - only interested in supporting themselves. This weekly Sirius series by Rick Munarriz, isn't even bothering to mask the fact that he is hoping for Sirius to fail any more...I will not renew... because I have lost a lot from your endless pumping of IRBT, NUAN, IPGP,P, CLNE - I could go on and on...Motley Fool is truly now for fools and I have done better ignoring their advice.

  • Report this Comment On August 25, 2013, at 9:05 AM, zukerman wrote:

    A charging mat will make the difference between using Pandora and actually spending money for entertainment? Rick, you come across as uninformed and disingenuous when it comes to Pandora. I'm not sure of your motivation for ignoring Pandora's short comings, but this isn't one of their main problems. Charging mats have been available via after market for some time and haven't exactly flown off the shelves. Imagine not having to reach down and plug my phone into an aux, you absolutely couldn't be that busy. Didn't these mats have a problem overheating? This is just what GM needs, another source of ignition. Any former or present owner of a GM vehicle will tell you their electrical systems are truly horrible. This move has Apple written all over it and wont sway the user to switch to Pandora and you know it. Pandora's market value is comprised of 101% institutional and soon they will come to realize nobody is buying the hype anymore. Three types of investors own Pandora, those that control the hype, old men that don't understand the technology and kids that are infatuated with a fad that is doomed. With the exception of your SAAR report, you've become the master of the mundane here.

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