Two weeks as the top music download in Apple's (NASDAQ:AAPL) App Store can do a satellite radio operator good.

Sirius XM Radio (NASDAQ:SIRI) announced yesterday that its Web-streaming application has been downloaded more than 1 million times by iPhone and iPod touch owners. That press release may have sent Sirius XM bulls on a high-fiving frenzy, but what wasn't mentioned in this announcement probably led the stock to close lower on the day.

After all, the program is a free download. Sirius XM doesn't make a cent off it, unless the user actually activates the company's premium streaming service. Which leads us to three crucial questions:

  • How many existing Sirius or XM subscribers agreed to pay $3 a month for access?
  • How many new Sirius or XM subscribers agreed to pay $13 a month for the service?
  • At the very least, how many App Store visitors are taking Sirius XM up on its weeklong free trial offer?

Without answers, we only have confirmation that Sirius XM's brand is strong enough to draw an initial crowd. Are brisk download rates true proof of success? Sirius XM's official channel on Google's (NASDAQ:GOOG) YouTube just recently topped the 1,000-subscriber mark -- a puny number, when you consider that YouTube subscriptions are perfectly free, and Sirius XM has loaded its channel with nearly 150 celebrity clips.

A million downloads through Apple sounds a whole lot better, but we'll probably have to wait until the company's next quarterly conference call to gauge whether iPhone and iPod streaming has boosted Sirius XM's overall visibility.

The rate at which downloaders activate streaming service will reveal whether there's a market for premium online radio. Unlike Sirius XM's clear advantages over terrestrial radio, a CD player, or even an iPod jack, the competition here won't guarantee an easy win. There are way too many companies providing online streaming for the iPhone and iPod without monthly charges, including well-heeled old- and new-media heavies CBS (NYSE:CBS), Time Warner (NYSE:TWX), and Yahoo! (NASDAQ:YHOO).

So what are you afraid of, Sirius XM? The numbers will ultimately decide whether your App Store gamble was truly worthwhile. Let's see them already.

Other ways to slice and dice satellite radio fandom: