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Sirius Keeps Its Hands on the Wheel

By Rick Munarriz - Updated Apr 6, 2017 at 12:32AM

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The satellite-radio giant strikes a deal to get to car owners the second time around.

Sirius XM Radio (NASDAQ:SIRI) is back where it belongs … behind the wheel.

The satellite-radio provider announced a smart deal with BMW yesterday. Buyers of certified used Beamers that have satellite-radio receivers already installed will be given three free months of Sirius service. Now, buyers of secondhand BMW cars will have at least a few months to consider whether satellite radio is something that they want to pay for.

This was a logical move for two companies that have been in cahoots since 2004. Sirius is offered as a factory-installed option on new purchases, and the first year of service is baked into the price of the car.

Sirius XM needs more deals like this, since it has mostly stumbled outside the showroom. It's fading in retail channels, where year-over-year subscription declines have been a quarterly occurrence.

Even the ballyhooed program for Apple's (NASDAQ:AAPL) App Store is getting lost in the shuffle mode. As of last night, the app had fallen off the Top 25 screen of Apple's most popular downloads. Pandora and the music-recognition program Shazam are now more popular in Apple's music category -- further evidence that iPhone owners gravitate toward free sonic solutions.

Sirius XM's easiest sells have come through its deals with GM and Ford. Auto manufacturers push the satellite receivers in exchange for a piece of the financial action, and roughly half of those who partake in free trials wind up paying to keep the service active.

Carmakers are also giving audiophiles what they crave through CD-ripping hard drives and iPod jacks, but the auto industry has an interest in pushing satellite radio until in-car routers become a more feasible big-ticket growth service.

No, BMW may not provide the ideal target audience. However, the satellite receiver is already there, and any signups will be incremental. Sirius XM surely wants more, but moves like this are definitely what it needs right now.

Other ways to slice and dice satellite-radio fandom:

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Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He owns no shares in any of the companies in this story and is also 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.

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