Most of you think that I'm crazy. You don't believe that President Obama's plan to give all citizens broadband access will mean much for Sirius XM
You may be right. Yet, last week, the satellite-radio superstar followed a mostly good earnings report by refusing to provide guidance on its first-quarter subscriber targets. Bad idea.
"Just say it, Sirius XM. You certainly won't be the only company to lose net subscribers this month," my friend Rick Munarriz wrote last week. "Mr. Market's giving everyone a mulligan. I'm not the only one who saw this coming, so just rip off the Band-Aid and come clean."
But it isn't. Not yet, at least. So I decided to ask customers. Are they dumping Sirius XM? And, if so, is it because Web radio is a viable alternative?
Web radio gets an ounce of interstellar flesh
Responses were mixed. Most who said they're leaving enjoy the content but they either (a) don't see enough of a difference with what they can get via Web stations such as Pandora or CBS
"When my XM subscription came up for renewal in December, I called to cancel it because I found Pandora to be a better service -- it's free and I can create my own custom stations," reader Mandy Porta wrote.
More incriminating, Porta says, was XM's begging. "XM made me an offer to renew my subscription at half price, but I still rejected the offer. Then, the representative told me that I could keep the service for a few more months at no cost, and if I started using my XM more and found that I liked it, I could renew then. Sounds to me like Sirius XM is struggling to keep its customers. How can they compete with custom, free radio?"
Fair point. Google
What's more, according to press reports, Vivendi's Universal Music is in discussions with YouTube to create a music-sharing site that would further crowd an already crowded market. Why stream Sirius when so many other options exist?
"We are canceling Sirius. Was considering doing that, then they started this new thing of charging extra to get the web feed (which is already very limited selection)," wrote reader Glenn Phillips. "Now granted, they would grandfather me in without the extra [charge] ... For now. I don't think that will be the case long term and I just don't want to have to keep up. I listen [to] CD, iTunes downloads, and Web radio more anyway."
Like Rick, I can't blame Sirius XM for charging more for premium service. What's troubling is that some users don't see the value in these (ahem) value-added services, and are canceling their subscriptions as a result.
Back away from that receiver, Fool
Others responded with the fervor of a National Rifle Association rally. "I'll stick with my XM radio until they bury me with my earbuds in my cold, dead ears," wrote reader Janet Groene, who edits a blog about traveling via RV. "Home is where I park it. Aim the antenna and I have music, comedy, news, and old-time radio no matter where I am."
Still others say that Web radio, while neat, is insufficient for on-the-go consumers who listen in the car. Or, better still, in the air.
"I'm a dedicated XM subscriber and am not planning to leave for broadband radio. My basic reason is that of access -- I use my satellite radio when I'm flying my 4-seat airplane," wrote reader Michael Roth. "The satellite service not only streams music for me and my passengers, but also broadcasts critical weather and flight safety data to my GPS. At this point, there is no other way to get all this information in the cockpit."
Nor in the driver's seat. Automakers such as Ford
And let's not forget that, in the past, regulators have sided with the recording industry in imposing higher royalty rates on Pandora and its peers. For a time, it seemed that Internet radio was doomed. It still could be; Web stations have yet to forge an agreement with artists and their representatives.
So while it seems clear that Sirius XM is bleeding subscribers now, a beleaguered Web radio industry isn't yet ready to fill the void. Not all of it, anyway.
