Should Sirius XM Worry About a Chatty Rival?

Sirius XM Radio (NASDAQ: SIRI  ) continues to thrive as a premium content provider, but it's not as if the competition's asleep at the wheel.

CC Media's (NASDAQOTH: IHRT  ) Clear Channel is beefing up the talk content features of its popular iHeartRadio app, adding a directory for the free platform's users to stream more on-demand programming.

When Clear Channel rolled out iHeartRadio, it began as a way for the terrestrial radio giant to stream its 850 stations beyond their local range. The app has gone on to attract hundreds of other stations, and in July we saw Clear Channel introduce iHeartRadio Talk to showcase its non-music content. The appeal of popular if not polarizing talk show icons including Glenn Beck, Sean Hannity, Rush Limbaugh, and Ryan Seacrest became available on the ad-supported streaming app. In a show of faith to the viral nature of user-generated content, chatty users were also invited to submit their own podcasts for inclusion. 

One can expect the visibility of iHeartRadio Talk to continue to grow. This morning, Clear Channel revealed that it will be teaming up with Disney's (NYSE: DIS  ) ABC to offer segments from The View and Jimmy Kimmel Live to coincide with the new fall season.

In and of itself, this isn't a big deal. Sirius XM had just 18 million subscribers when iHeartRadio was launched as a website five years ago. Despite the platform's evolution into a mobile app with more than 20 million registered users, Sirius XM serves more than 25 million subscribers now. 

However, Clear Channel does point out that 60% of the iHeartRadio Talk usage is coming from mobile devices. In other words, these aren't folks listening at home. A lot of those users may be listening in their cars, and that may come in lieu of satellite radio. 

For now, it doesn't matter. The market for audio continues to expand, and there's plenty of growth for both Sirius XM and iHeartRadio to enjoy. There is no reason for that to end anytime soon. Automakers moved 1.5 million new cars off dealer showrooms last month, and that's great for Sirius XM. The boom in smartphone usage naturally bodes well for Clear Channel's app -- and even Sirius XM's own online initiatives.

Until the market of accessible ears is saturated, everybody can be a winner.

Investors should be aware of the trend and developments, but there's nothing to worry about just yet.

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Read/Post Comments (7) | Recommend This Article (1)

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 September 09, 2013, at 7:11 PM, tjtoretire wrote:

    The key is as you stated "became available on the ad-supported streaming app." I, like millions of others, do not want to listen to radio commercials. I choose to not listen to them. I prefer to listen to the content I choose without commercial interruptions and am willing to pay Sirius a subscription fee to do so. Also, Sirius satellite signal strength is great no matter where I drive... unlike terrestrial radio signals.

    Sirius offers great products and features no one matches.

  • Report this Comment On September 09, 2013, at 8:36 PM, 67vair wrote:

    How's that iheart radio reception across the U.S.?

  • Report this Comment On September 10, 2013, at 5:16 AM, zukerman wrote:

    The price of an HD receiver is now only about $50 and couldn't improve listening for terrestrial, yet you tout the attraction to a format that most have abandoned for what they listen for, commercial free. You come across as 40 going on 15 with when your stock reaches $20 again and the numbers fail to support your warnings.

  • Report this Comment On September 10, 2013, at 7:05 AM, edwardstewart wrote:

    Rick Munarriz is the new Rocco Pendola. Should Sirius invested be worried about that?

  • Report this Comment On September 10, 2013, at 8:02 AM, Varchild2008 wrote:

    None of this matters since Rick told us no one in America is driving cars any more.

  • Report this Comment On September 10, 2013, at 9:53 AM, Austin77478 wrote:

    Rick knows what he is doing. One of the ways he would get clicks is to stir Sirius' pot.

  • Report this Comment On September 10, 2013, at 7:40 PM, JamesRobertDobbs wrote:

    "However, Clear Channel does point out that 60% of the iHeartRadio Talk usage is coming from mobile devices. In other words, these aren't folks listening at home."

    Huh. And here I thought that people used mobile devices "at home." Now I know that if a person is at home, they MUST be listening to Internet Radio on their PC, and if they're listening to Internet Radio on a mobile device, they're probably in their car. Yeah, that's the ticket.

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