BMW is extending its relationship with Sirius XM Radio (NASDAQ:SIRI).

The automaker will now keep pushing satellite radio in its cars through at least September of 2011.

Satellite radio is a no-brainer for the struggling automaker industry. Pushing other entertainment appliances like CD changers, HD radios, and back-seat video monitors are one-time sales, but satellite radios create monthly revenue-sharing streams for the car companies.

Few auto manufacturers have proprietary subscription services in place like General Motors' (NYSE:GM) OnStar service. If car sales don't pick up, collecting royalty checks from Sirius XM sure beats watching a rare buyer drive away without an activated receiver.

This may make it surprising why recent car ads -- like those of Ford (NYSE:F) and GM's Cadillac -- have been promoting the availability of in-dash hard drives that rip CDs. Having gigabytes of music stored in a car's dashboard may not be comparable to satellite radio, but it does tinker with the value proposition of satellite radio if drivers spend more time listening to their own music.

It's a delicate balance for the automakers. At what point does adding an iPod jack help sales to the point of being detrimental to satellite radio? Ford's exclusivity with Microsoft's (NASDAQ:MSFT) Sync technology ends this month, so expect other carmakers to offer cool voice-activated control over dashboard data storage.

Another point in discussing this morning's deal extension is that BMW really doesn't have much of a choice. Since Sirius XM watches over both Sirius and XM since this summer's merger, the company now should have the upper hand in negotiations. Where else will the automakers turn? It's not as if Apple (NASDAQ:AAPL) is going to pay them chunky monthly royalties for installing iPod jacks. Chrysler may be championing in-car Wi-Fi as an upsell subscription -- opening up the dashboard airwaves to Internet radio -- but that's going to be a hard sell in this economy.

So Sirius XM finds itself in the enviable position of channeling Marlon Brando in The Godfather, giving automakers an offer they can't refuse.

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Longtime Fool contributor Rick Munarriz is such a fan of satellite radio that he subscribes to both Sirius and XM. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.