Should Sirius XM Radio Be Worried About Internet Radio On Smartphones?


When XM Radio and Sirius radio decided to merge a few years ago, it was most likely the only survival strategy left for long-term viability of both companies. Satellite radio subscriptions were not growing at a pace needed for consistent growth, and having a unified front to partner with automakers for satellite radio in new cars was becoming all-important. Fast forward to 2010, and smartphones are taking over from standard cellphones. Herein lies a huge problem for Sirius moving forward: competing with internet radio that's personalized and on-demand.

If you own an iPhone or Google-powered Android phone, the amount of customized radio-type listening services is almost limitless. For iPhone and Android, the ever-popular Pandora becomes your own radio station with only the artists you like. Download the Stitcher app for Android or iPhone and you have popular radio programs (Fox Radio, CNN, more) and podcasts available at any time. Even though Sirius has apps for its satellite radio service on popular smartphone platforms, will customers pay for it with so many other options only a download away?

Clear Channel sold out its inventory of mobile ads recently, and mobile ads are generating as much revenue as ads from PC-based internet radio listening. Although SIRI shares have almost doubled from the year-ago period, they are still under $1 as of today.

Except for a few notable exceptions like Howard Stern and Martha Stewart, almost all programming from Sirius can be replaced by smartphone apps, and often for free or next to free. A simple input jack on any car stereo (OEM or not) and your smartphone becomes your personal, custom radio station. Will Sirius have an answer for that? Mobile broadband may have started taking over from satellite-based radio by that time.


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