Last month, I finally got Sirius
I'm not alone. I was one of 440,000 new users that Sirius signed up in its December quarter. XM Satellite Radio
Now, don't get me wrong. I think XM and Sirius have what it takes to become the next two entertainment conglomerates. They just need time and most, if not all, of the right moves.
But back to my Sirius tale.
My first impression with Sirius hit an early pothole. I rushed to sign up for a lifetime subscription after crunching the numbers, only to find that the signal reception on my Sportster boombox was pitiful inside my house. What had I done? I wasn't sandwiched between high-rise buildings. I wasn't a bridge-dwelling troll. Curses, suburbia, you've let me down again! Thankfully, heaving the antenna outside a window remedied my problem. I was in.
Test drive tune-up
Now, with weeks of seasoned exploring, I have a fairly decent feel for Sirius. I love it, even though its programming isn't always perfect. I have yet to crack a chuckle listening to the two comedy channels. Having more than 60 music channels covering everything from bluegrass to an Elvis Presley station is awesome. But disc jockeys chiming in after every other track to pitch Sirius and its other station offerings sort of takes the shine off the "100% commercial-free" pitch.
I'm also a bit surprised by the redundancy. There is a lot of overlap between XM and Sirius and if the two want to see the gravy day when millions of radio listeners decide to subscribe to both services simultaneously -- growing the sector's earnings potential -- they will need to show some differentiation. Sirius and XM have done well in splitting up sports programming and popular morning radio personalities, but that should be only the beginning.
If you want financial news, they both serve up the same two channels: Bloomberg Radio and General Electric's
Yes, that's right. I don't think XM and Sirius will only be good for collecting $10-$13 a month in tolls from those who make the inevitable migration to satellite radio. Just knobbing through the dozens of digital radio channels you almost feel as if a moment of genuflection is in order because there is so much potential there ripe for the mining.
XM and Sirius will become full-blown entertainment companies. Sirius hiring Mel Karmazin as CEO was no accident , and I'm sure he sees that, too. For example, they own their music channels and that's the kind of specialized focus that you just don't see on the local or national radio dial anymore. With an attentive audience possessing perfectly targeted demographics and disposable income to burn, what's to stop the music channels from pressing artist compilations and organizing touring musical festivals or -- in a more dramatic leap -- supplanting the archaic major record labels themselves? Not much. Aren't we just an e-commerce skip away from allowing satellite listeners to purchase digital tracks -- or the physical CDs -- being played on the air with a generation of receivers who can talk back (or who are, on a more rudimentary level, a mouse click or phone call away)? Perhaps. The commercial-free music isn't satellite radio's killer app, it's the killer tool.
I guess at this point I should voice my displeasure with Sirius in that, unlike XM, it doesn't offer an exclusive channel for unsigned bands. After seeing the original MP3.com sign up 250,000 bands and collect more than 2 million digital tracks, why ignore the grass-roots marketing machine?
Ad it up
Running commercial-free proprietary music channels and airing third-party news and talk stations doesn't exactly kick open the advertising floodgates. XM generates just $0.30 a month in advertising revenue on each subscriber. That's why XM and Sirius need to play a bigger part in authoring their spoken content, while turning to brand advertisers to sponsor their music channels.
That's when the advertising revenues will be significant. By the end of the year, XM and Sirius should combine for nearly 8 million subscribers who possess the characteristics that marketers covet the most. I know it's easy to jump the gun and look ahead at the advertising possibilities once Microsoft
Brand that up some more and you begin to see publishing possibilities, even crossing over into producing specialized television content. The online strategy will gel into another moneymaker once the personalities harden and the company understands the medium better -- or just lets proven winners like Amazon
The only thing stopping them from turning that key -- the one checklist notch away from transforming into bona fide Rule Breakers -- is the time and common sense to connect the dots. It's easy. As I know now, the solution to a more satisfying reception is often as simple as heaving an antenna over the windowsill.
Will Sirius ever lap XM in revenue and subscriber count -- and if so, when? Will folks ever be willing to pay as much for satellite radio as they do for satellite television? All this and more -- in the Sirius discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz loves his Sirius Sportster radio and has become addicted to Channel 22 -- First Wave -- even if it means hearing Haircut One Hundred's Love Plus One for the billionth time. He does not own shares in any of the companies mentioned in this story and is a member of theRule Breakersanalytical team. The Motley Fool has adisclosure policy.