You would think that Sirius XM Radio (NASDAQ:SIRI) would be shedding critics as quickly as it's been shedding short-sellers.

The company pulled off its unlikely merger last year. It managed to skirt filing for bankruptcy protection two months ago. And it's also seen its stock pop sevenfold since bottoming out seven weeks ago, as of last night's close. Sirius XM clearly isn't perfect, but one would expect at least a temporary truce from its media foes.

No such luck. BusinessWeek became the latest financial publication to take aim at Sirius XM, with this week's "Serious Threats to Sirius Radio" article.

Disrupting the disruptor
The BusinessWeek article details the gadgets -- both real and forthcoming -- that could put a dent in Sirius XM's subscriber base. Let's go over some of the contenders for ear time:

  • Slacker G2 is a portable media device that uses Wi-Fi to load up on custom-tailored music that can be played back even when an owner is away from the cloud. The music is stored in four- and eight-gigabyte models. The free ad-supported model spits out just an ad or two every hour, or users can pay $47.88 annually for no commercials and the ability to skip through tunes, request songs, and see complete lyrics. The G2 is now on the market, with heavies like (NASDAQ:AMZN) and Best Buy (NYSE:BBY) selling the four-gig model for less than $200.
  • Major League Baseball, a premium content partner for XM subscribers, now has a deal in place to stream every baseball game this season to iPhone and Wi-Fi-tethered iPod touch owners. At Bat 2009 is just $9.99 for the entire season.
  • Abbee is a $250 device, still in the works, that records music from FM stations, strips out commercials, and stores it on the gadget's hard drive. Is it legal? Won't the wafer-thin playlists on terrestrial radio pose a problem? We'll see, I guess, if Abbee hits the market.
  • On the talk-radio front, Stitcher packages free online podcasts into custom news and talk radio channels. Foneshow delivers streaming audio through an ad-supported model.

BusinessWeek has compiled a collection of gadgets and apps with varying degrees of impressiveness. Of course, it's no easy feat for a single person to carry and use all of them at once. Do you want to carry around an iPhone and a Slacker G2? How quickly do you want to wear down your smartphone's battery, and are you prepared for the entertainment void if you don't have a charge? Is your car wired to play all of these gadgets, or is it down to just you and your earbuds?

There is no denying that the future will throw plenty of challenges at Sirius XM. But it's premature at best -- and immature at worst -- to assume that consumers' migration to digital music will leave no room for a transitionary medium like satellite radio.

Be the Netflix
If there is a model that Sirius XM should be studying, it's none other than Netflix (NASDAQ:NFLX). Critics have been suggesting for years that a shift away from DVDs as a way to watch movies will kill Netflix.

It hasn't yet, has it? Netflix continues to grow, topping 10 million subscribers earlier this year. DVDs are still the company's flagship media rentals, but it is also sleeping with the enemy by aggressively pursuing the digital distribution platform that once posed its biggest threat for obsolescence.

Sirius XM is doing that, too, offering up Web streaming and an iPhone app (due out later this quarter). My only concern here is that Sirius XM is approaching online streaming and smartphone streaming as upcharge opportunities, even for existing subscribers. Meanwhile, Internet radio heavies like Time Warner (NYSE:TWX), CBS (NYSE:CBS), and Pandora are giving such things away.

That's a sharp contrast to the Netflix digital model. The company offers a growing selection of titles at no additional cost to active subscribers, defying the pay-as-you-go approach to digital media pursued by companies such as Amazon and Blockbuster (NYSE:BBI).

Hopefully, Sirius XM will be able to correct this quickly if it sees an uptick in churn and a downtick in subscribers over the next few quarters. It has a longer window to get things right than the market thinks, though it can't ignore the sheer power of the booming smartphone market (which has the critical mass that non-iPod devices lack).

The market doesn't have to cut Sirius XM some slack -- or even some Slacker. But it would be nice to give satellite radio the benefit of the doubt from time to time.

More news than static on Sirius XM: