SiriusXM (NASDAQ:SIRI) has quietly become a sort of default option for many car owners. Since the service is built into many new vehicles, people get to sample it, and it's very easy to keep the service beyond the initial trial.

That might help explain the strong gains the stock has enjoyed recently.

What happened

Even though the company reported its first quarter 2018 results on Apr. 25, its shares continued to slowly push upward through May and into this month. After closing April at $6.33, shares rose to $7.10 last month, a 12% gain according to data provided by S&P Global Market Intelligence.

The first quarter results showed that SiriusXM can thrive even in the face of an increasing number of entertainment options for drivers. The service may not be as unique as it once was when its only competitor was traditional radio, but its mix of music, talk, and sports in an easy-to-use package still appeals to many consumers.

A woman drives a car.

Satellite radio is built into most new cars. Image source: Getty Images.

So what

Despite the threat from podcasts and streaming music apps, SiriusXM is still growing. The company leverages programming like live sports and Howard Stern to attract audiences.

In fact, the company topped 33 million subscribers at the end of the first quarter with the company adding 330,000 new paying customers during that period. In addition, first quarter revenue rose by 6% year over year to $1.4 billion, and net income came in at $289 million, up 40%.

"We are on-track to meet all of our full-year guidance, and I'm thrilled to announce we topped 33 million paying subscribers," said CEO Jim Meyer in the earnings release. "We continue to add compelling, diverse programming across our talk, sports, comedy, and music channels."

Now what

The challenge facing satellite radio is that car and smartphone integration will only improve, increasing the odds that consumers will consider dropping their SiriusXM subscriptions. Right now, it's a bit cumbersome to navigate multiple music services, podcasts, and sports offerings from a phone, but that friction in the user experience won't last forever.

To compete, SiriusXM needs to continue bolstering its content and seek out one-of-a-kind programming. That's tough when so many comedians and radio personalities have podcasts, and an increasing number of people subscribe to on-demand music services. Still, like cable, SiriusXM has an advantage in the vastness of its service, and so far, that has kept customers coming on board.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.