This Week in Sirius XM Radio

Satellite radio is always on the move with Sirius XM.

May 31, 2014 at 9:05AM

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ:SIRI) moved higher on the week, inching up 0.3% to close at $3.28. The move fell short of the Nasdaq's 1.4% gain. 

There was more going on beyond the share-price gyrations, though. Sirius XM wraps up another of its two-week previews for dormant receivers. On the streaming front, Apple (NASDAQ:AAPL) finally closed on a $3 billion deal for Beats Electronics and Beats Music, and sources say that Amazon.com (NASDAQ:AMZN) will be launching a limited streaming service at a tempting price point. 

Let's take a closer look.

Money for nothing and your clicks for free
We're in the second week of another Sirius XM free preview where it turns on the growing number of inactive receivers. Paying subscribers aren't likely to complain. Freeloaders are getting less than half of Sirius XM's channels, and the two free weeks won't likely be repeated for several more months.

This is a smart thing that Sirius XM does. It's easy to turn on the receivers, and any drivers that get smitten enough to come back as paying subscribers are incremental. The preview runs through Monday. 

We got the Beats
Apple announced the largest acquisition in its history, agreeing to shell out $3 billion for Beats Electronics and Beats Music. The premium headphone business is the bigger business, but the nascent Beats Music platform and the arrival of music icons Jimmy Iovine and Dr. Dre is what is more relevant to Sirius XM investors. Beats Music launched in January to plenty of fanfare. It's a Spotify-like on-demand premium service, but it raises the bar with celebrity-curated playlists based on a deep dive of various moods. 

Beats Music has attracted just 250,000 paying subscribers -- out of the 5 million that have checked it out -- but that's not necessarily horrendous for just four months of availability. Between Apple's CarPlay platform for in-car connectivity going into various car models and Apple's ability to serve up discovery music via iTunes Radio and now on-demand audio through Beats Music it does make Apple a triple threat to keep an eye on in the future.

Amazon gives away the store
Sirius XM investors know better than to worry about tech giants moving into streaming music. The SatRad star offers more than just tunes, and it's been able to keep growing despite the 2012 arrival of Xbox Music and last year's debut of iTunes Radio and Google Play Music All Access. However, Amazon could be a different beast. 

Five different music industry sources have confirmed to BuzzFeed that a Prime music service will roll out in either June or July. The catalog will be restricted to songs and albums that are at least six months old, but streaming will be available at no additional cost to the Amazon Prime annual memberships that they are already paying for. The inability to access new tunes will be a deal breaker for some, but it's hard to look this gift horse in the mouth. This will definitely be something for Sirius XM investors to watch, especially if it includes seamless Bluetooth mobile connectivity.

R.I.P. Internet -- 1969-2014

At only 45 years old... the Internet will be laid to rest in 2014. And Silicon Valley is thrilled. Because they know... The Economist believes the death of the Internet "will be transformative." In fact, the CEO of Cisco Systems -- one of the largest tech companies on the planet -- says somebody's going to bank "14.4 trillion in profit from one concept alone."

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com, Apple, and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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