Now that we've had the weekend to digest the news about Sirius XM Radio's
Will the highly anticipated app be a hit? Is it the ticket to high-margin streaming revenue? If it ever strikes licensing deals overseas and can clear regulatory hurdles, is this the birth of Sirius XM as a global premium radio brand?
Those answers will come in time. For now, all we know is that since it launched on Thursday, the application has been a popular download through Apple's virtual store for iPhone and Wi-Fi-connected iPod touch owners. And that popularity comes in spite of offering none of the content behind satellite radio's costliest contracts with Howard Stern, the NFL, and Major League Baseball.
Drawing iPhone and Web-connected iPod touch users is the primary objective of any App Store debutante, and to that end, Sirius XM is succeeding. As of last night, Sirius XM was Apple's second most popular free download.
Cynics will point out that every new heralded app has its day in the sun on Apple's perpetually updated rankings. Just as movie releases and new CDs fade quickly after their initial releases, the real test will be whether Sirius XM's program can stay on -- or at least near -- the top in a few weeks. It also bears pointing out -- and I'm not making this up -- that the one free program that's currently more popular than the Sirius XM's app is a game that simply involves flicking balls of paper into an office wastebasket.
Trash is more popular than Sirius XM? You go, Paper Toss.
Sirius XM is hoping to make a dent in an arena that's already inhabited by several truly free music-discovery programs, including Slacker, Pandora Radio, and imeem. It's also competing against App Store music sites bankrolled by fat cats, including CBS
Sirius XM was expected to lead the established sites in current downloading volume because most music fans have already downloaded most -- if not all -- of the other programs. But you still have to tip your hat to Sirius XM. It has succeeded in attracting a crowd.
We only know half of the story behind the Sirius XM app. Unlike the plethora of free -- and typically ad-supported -- programs available through Apple's storefront, this one requires activation.
Sirius XM currently has no way to monetize the streams unless it attracts an incremental number of paying customers. Growing the listener base is important to a company that closed out this year's first quarter with 404,422 fewer subscribers than when it started.
Holders of existing accounts that include satellite receivers can download the program. Well, anyone can download it, really -- but there's a catch. Account holders have to pay $2.99 a month for premium online streaming that includes usage of the App Store program. Those who don't have receivers can pay $12.95 a month for the premium streaming service. A weeklong free trial offer is available, too.
The different offers are creating a bit of confusion, and Sirius XM isn't helping its case. Despite the nine-paragraph description in Apple's App Store, it never spells out the actual pricing of its "free" program.
To quote the description:
ALREADY A SIRIUS OR XM SUBSCRIBER?
Streaming to your iPhone and iPod touch is FREE with your Premium SIRIUS Internet Radio or Premium XM Radio Online subscription.
A paragraph later, it explains that those who aren't already premium online subscribers should download the application first and then visit the company's website "to find out more" about getting the service.
There's also a bit of unrest among subscribers who paid $500 for lifetime subscriptions to Sirius. That plan includes free online streaming, but not the premium access required to use the iPhone program.
There may be a reason that those who have downloaded the program have rated Sirius XM Premium Online just two out of five stars on Apple -- lower than any of the other music streaming services I mentioned earlier.
Being popular is good. Being notoriously popular is not.
Another reason for the crummy ratings could be the lack of Sirius XM's top draws. Howard Stern, Major League Baseball, and the NFL -- the priciest content contracts in the Sirius XM arsenal -- are not available through the Apple application.
A lack of play-by-play coverage of pro baseball and football games is significant. Just ask yourself where DirecTV
Going sans Stern is an even bigger gaffe, because his two channels are currently available online. Did Stern hold out for more money? Is this a shrewd negotiating ploy on Stern's behalf before his five-year deal comes up at the end of next year? Is Stern's plan to go it alone, offering a premium Web-based network come 2011? If folks are willing to pay a premium for Sirius XM online through apps -- something we'll find out in the coming months -- then why no Stern?
The App Store description doesn't mention the content that isn't available, and that exclusion is probably triggering a few one-star ratings.
The App Store program didn't come until nearly a year after the merger between Sirius and XM was completed. Did attempts to get Stern on board cause a delay? And if the Apple application is going to lack its star attractions, shouldn't it take a page out of the Netflix
There are many questions left to answer. All we know for now is that the app is being downloaded a lot, mostly by iPhone and iPod owners who are rating it poorly.
Other ways to slice and dice satellite-radio fandom:
Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He owns shares of Netflix and is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.