Sirius XM Hops on the Free Way

If you are driving one of the tens of millions of cars out there with inactive satellite radio receivers, Sirius XM Radio (NASDAQ: SIRI  ) wants to give you a treat. It's turning on those receivers, making 60 channels available for free through June 2.

The preview channels are mostly its popular commercial-free music stations, but there is also a handful of sports, entertainment, and talk content to convey a real taste of what's available on premium radio. 

To be fair, this isn't exactly news. Sirius XM kicked off the preview on May 20. This also isn't the first time that the media giant turns dormant receivers on for two weeks. It ran this promotional stunt four months ago. Shorter previews have been common in previous years.

It's easy to see why Sirius XM is going this route. Just like the chicken joint at the mall food court is handing over samples on toothpicks to woo hungry patrons with a full meal, Sirius XM wants to give you a taste of what's on the menu.

More than half of the cars out there with satellite radio receivers installed are inactive, and that's a ratio that's going to continue to shrink. It's not that Sirius XM is doing anything wrong. It's just simple math. More than 10 million cars will be sold with Sirius or XM receivers in this country this year, but Sirius XM expects to close out the year with 1.25 million more subscribers than it had when 2014 began. 

Where did the other 8.75 million drivers go? Well, it's not as simple as that. For starters, just 42% of buyers of new cars stick around as paying subscribers after their free trials run out. You also have the churn of existing drivers. Every month, we see an average of 1.9% of self-pay subscribers cancel their plans. The 1.25 million figure is net additions. The gross additions sum is naturally substantially higher before it's offset by folks nixing their service. Making matters even more complicated, the 1.25 million in net additions also includes folks buying used cars, where Sirius XM has been ramping up its marketing efforts. 

It works in the end. There have been just three quarters since Sirius and XM completed their merger in 2008 that Sirius XM has posted a sequential dip in subscribers. In short, Sirius XM knows what it's doing. If it's dangling free tunes and talk radio on a toothpick from now through next Monday, it's because it has worked in the past. Rock on, Sirius XM.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (4) | Recommend This Article (4)

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 May 29, 2014, at 10:16 AM, Varchild2008 wrote:

    Perhaps Sirius XM should start selling toothpicks....and chicken!

  • Report this Comment On May 29, 2014, at 3:19 PM, chris100000 wrote:

    Perhaps you should offer an opinion related to trading or the article instead of being a funny guy.

  • Report this Comment On May 29, 2014, at 11:14 PM, ara1029 wrote:

    ....*TRYING* to be a funny guy.

  • Report this Comment On May 30, 2014, at 11:03 AM, OldsDr wrote:

    I don’t understand why they can't work with rental car companies to offer free Sirius on every rental. Obviously the rental companies need to make money on the deal too, but it just seems like a whole group of people that could be advertised to while on vacation or doing business. Especially the vacationers, since they most likely have the disposable income to pay for a subscription when they get home.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2974569, ~/Articles/ArticleHandler.aspx, 12/19/2014 8:51:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement