Backseat Driver at Sirius

• Email
• Share
• Print

The "are we there yet?" queries from impatient kids on car trips are about to be replaced with "can you drive a little slower? My show's not finished yet."

At least, that's the way that Sirius (Nasdaq: SIRI) would like it to be. Even though we've been talking about the possibility of satellite radio offering streaming video for more than two years now, Sirius had something for all to see at this week's CES showcase.

The new system on display should hit the market in a few months. According to Orbitcast, Sirius was streaming Cartoon Network content on a Ford (NYSE: F) SUV equipped with the SiriusConnect system. Pricing and actual content information for SiriusConnect haven't been made public, though Orbitcast indicates that existing subscribers will pay about $300 for the hardware, and an additional $6.99 per month to receive three different video channels.

The pricing may not be an issue to folks spending as much as $2,000 for high-end dual headrest monitors as an add-on to their new cars. Content may be the bigger problem. If all three channels will be streaming toons, it may limit the appeal to older families. It also won't be much of a match for the RV and conversion van buffs who have a wider selection of programming, thanks to pricier satellite television offerings. And let's be frank: Cartoon Network and Boomerang are respectable, but the service won't be an easy sell if it doesn't tack on either Disney's (NYSE: DIS) Disney Channel or Viacom's (NYSE: VIA) Nickelodeon.

Sirius may not be on the best of terms with Viacom, after Howard Stern's defection and its tapping of former Viacom exec Mel Karmazin to become Sirius's CEO, but this isn't the kind of venture to be taken lightly. Kids aren't going to gravitate to just any content thrown their way. If Sirius gets sloppy, it opens up the door for rival (and Motley Fool Rule Breaker selection) XM (Nasdaq: XMSR) to come in and do it right.

In the end, it's all about stretching the elasticity of the $12.95 a month that both Sirius and XM are charging. With satellite radio tacking on fewer net subscribers in 2006 than it did in 2005, an actual rate hike for their flagship services may be a hard sell. That's where new offerings -- like backseat TV -- could help get Wall Street back in the driver's seat.

Check out what executives at both XM and Sirius had to say back in September:

• Fool on the Street: Sirius Potential
• Fool on the Street: Fine Tuning at XM

Disney is an active Stock Advisor pick. To find out what other great companies have been recommended, take a free 30-day trial to the market beating newsletter today.

Longtime Fool contributor Rick Munarriz is a Sirius and XM subscriber. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does own shares in Disney. The Fool has a disclosure policy.