Car Audio Entertainment: RaySat, AT&T Make Their Move

Reading the news one would think that Sirius XM Radio (SIRI) has a monopoly in satellite delivered entertainment to the car. However, there are indeed competitors on the horizon, and some of them have big names. AT&T (T) is teaming up with RaySat to offer CruiseCast in-vehicle entertainment. The partnership also extends to Avis Budget Group (CAR), who intend to roll out services beginning in mid 2009.

CruiseCast concentrates on video, having deals with networks such as Disney Channel, Disney XD, Discovery Kids, Animal Planet, Nickelodeon, Cartoon Network Mobile, USA, COMEDY CENTRAL, MSNBC, CNN Mobile Live and CNBC. In all there are 22 video channels in the service. Also included will be 20 music channels.

Through Avis, CruiseCast will cost about $8.95 per day vs. about $5 for Sirius XM. There is little detail on whether CruiseCast intends on going mainstream via installation deals with OEMs, or even in the retail channel. CruiseCasts video line-up is impressive, but will the audio side of their entertainment stream measure up? Will it be affordable enough for consumers?

For the time being, there are many hurdles for CruiseCast, but with AT&T backing up the deal, the company can afford to bring to market a competitive choice. The biggest initial customers are ;likely to be the rental business, RV enthusiasts, and America’s truckers.

Disclosure: Long Sirius XM

Comments

[JamesPS:]

The Delivery mechanism doesn't matter in the long run. What matters is content. sirius xm has the best content at this time. They need to keep it that way. Music is only one dimention to audio entertainment. What IPOD and Zune are missing right now is live streaming content / exclusive content. Everyone has music channels. Whoever partners first with Sirius XM will have a clear advantage for some time to come. Sirius XM is really a media company not a sat company. If sirius xm was simply a bunch of music channels, myself along with willions of other would not be paying $12+ per month for the service.

Jan 09 05:51 PM

[Kabin:]

SiriusXMCruisecast.

Jan 09 06:50 PM

[defender:]

OK. . let's rally the advice everywhere you can. advise the managing section of Sirius.. . .let's get these receivers installed in basic home devices.. tv's sony, panasonic, LG, any manufacturer of tv's because large percentage of US population have basic home speaker systems attached to these devices, and they could have sattelite radio systems in their homes and customer base far exceeds those that have satellite radio in their cars. .. .not genius.. . pretty basic . .but a goldrush if they will do it.. stocks would get back to and exceed the base of most long term investors.. .

Jan 09 10:40 PM

[Round & Long:]

Your pretty optimistic defender. Long's already got screwed. The real longs left this stock a long time ago. Mel F ed them by letting the stock price get so low. By his own words "Ugly". Remember the video of Mel saying your report card as a CEO was you stock price. Well that say's it all. FFFFFFFFFFFFFFFFFFFFFF...

Jan 10 06:38 AM

[asm610:]

R&L,

You don't speak for the real longs. Real longs know how companies grow......real longs utilize underperforming stocks to their advantage during tax season......real longs (in short), are still in and making money on SIRI!

Jan 10 08:29 AM

[relmor:]

You have good points, SL62. But we all must understand who "money" is. In order to create money you must make something for provide something people want and can afford. Our wealth leaving our country every day means we can no longer afford....
1. 20 dollar meals
2. SOmeone else to do you lawn.
3. Movies everynight.
4. Expensive house assessories.
5. Luxury cars.(no more credit, no more high paying management jobs..)
6. Boats.
7. Vacations every year.
These are all concepts that Americans are going to forfeit to get out of this mess. our standard of living will change forever. Foreign countries arent going to sit back and watch us enjoy the fruits of their "labor" anymore. 2 billion dollars a day just to keep our country running. It will go up. Someone has to buy this foreign debt. To keep those "dollars" from coming home by changing the dollar thats accepted here is not going to work. These dollars are all in the form of treasures my friend, not FRN's. They are electronic blips on a computer screen. When those dollars go to "work", there will be too many dollars chasing too few goods"inflation". So whenever one wants gas, oil, nat. gas, coal, steel, gold, minerals, food, water, this stuff is going to cost a fortune. High def tvs will "deflate" due to market share loss(those units will be sold at the price they want elsewhere if they cant get it here)...etc...
So you will see some prices come down, as each country as you said "races to the bottom". Your right, its not a coincidence that every country on earth worries about a strengthening currency"making your products cheaper and cheaper as possible". Of course the end game of devaluing all currencies is higher prices in all currencies. Is inflation any less of a problem if its global? Do I care if China is paying more for water, if I have to as well. This should raise their prices, but China is fighting that and they have better tools to do it. Take away our service industry and retail that supports credit spending, and you dont have a GDP that impresses anyone...vs. what we spend as "work units" As of right now, it would take infinite work units to pay our debt off. Only solution is hyperinflation, or a complete meltdown of our economy. Only two choices. Deflation is not an option, as it would kill our country.

Jan 10 10:04 AM

[Neal Barkett:]

I know I keep pounding the same message, but when the new Mirge comes out for sale I hope Sirius Xm has a marketing package that hits all of the mainstream. Gotta come out with an image that appeals to all ages. They need to come out with a BLAST that shows that they won the merger war and it was well worth the pain. They need to pound their chest and have a positive strong showing of what Sirius Xm offers to everyone. Which it does. It has something for everyone. I don't know if the Superbowl would be too early for Mirge but they need to come out fighting for that entertainment dollar. We all know it's a great product hands down! Know it's time to appeal & educate the rest of America to Sat. Radio. It's still the best kept secret in the medium for entertainment and information. It would be money well spent.

Jan 10 11:09 AM

[mlongj:]

With regard to the article, I do not see this as being a major competitor to Sirius XM. Rental businesses, truck drivers, and RV enthusiasts? Really? Well all three of these areas are in big trouble going forward with the current economic downturn. The trucking industry is on the brink of bankruptcy in many areas of the country (over 3000 trucking company failures in 2008). If the customers begin defaulting on bills from trucking companies (presently beginning to become a huge concern), they will default on the payments to creditors. The RV industry is suffering huge losses at the moment as well (connected to the auto industry Ford). Car rental companies are seeing the effects as well (those that used this service have lost their jobs in many areas of the country).

In economic downturns, individuals seek out cheap entertainment, such as Sirius XM, movie rentals, etc that can be enjoyed at home or in ones car. Sirius is not an extravagant form of entertainment compared to what is available today. It will remain "cheap" for the next 2 and 1/2 years due to the price cap. This is probably why Mel says that he can guarantee a revenue increase in such an economy, where others are really struggling to break even.

Relmor

I understand your perspective on our dire economic situation, but it really is not as bad as you are suggesting. If and when the bottom falls out, it will be much more tolerable in this country than anywhere else in the world. The world is much too interconnected to let the US go bankrupt, and the world knows this simple fact. I would predict major problems going forward in China as we are not buying their goods like we used to. They will suffer more than we will as will most non-democratic countries. The chinese must lend us the money to support their own economy. After all, we owe them half a trillion already. What happens if we can not pay them back? What will they do? What can they do? They have the problem of feeding and controlling nearly 2 billion people in this downturn. There might be major unrest in China and that should keep them plenty busy; which is why they will continue to lend us the money necessary to operate. As we approach a one world government, debts will be forgiven as it has been done in the past. The only difference is that it will be the debt of the US that is forgiven and not third world countries. The inevitable is somewhat further in the future as China is ready and willing to lend us another trillion or so to get through this debacle. It's not the "end of the world" yet. However, I do see a socialist society before I die on a global scale. I believe this will be due to basic survival as we continue to deplete the resources of the world. Nevertheless, it will not be this year or the next or the next in my opinion. But for the sake of argument let's say that it does come to pass and we fail as a nation in the next 2 years. Will it really matter what equities are held by individual investors? No it will not. It will not matter if you bought or sold as nothing will have value at all. In a socialist society, everyone is equal and his or her needs are met by the government which controls everything. We are all in this together. Nevertheless, I consider your posts to be very thought provoking and I appreciate the opportunity to respond.

Long Sirius XM

Jan 10 11:20 AM

[sl62:]

relmor..

Your POV is very much about old-school responsibility, which is to be commended. You're right about some of the consequences you mention..although from my perspective, I come from a middle class midwest family who didn't have a boat, I cut our grass myself and never went to the movies every night. People who will be cutting these things out might have more of an adjustment...which is not a bad thing either. There are two types of pain. 1. the kind we just went and are gong through via greed and mistakes or 2. the self imposed kind (like higher taxes, etc)…and which is a much more controlled and less chaotic form. So the first thing that is going to happen is we will take on (approx) 1.5T more debt (for stim package to get us moving again), which will be roughly 11.5T on a 14.5T GDP (80%)...maybe a little more depending on how much we contract. Then in 2011, when hopefully we’ve stablized, we will see raised taxes to start drawing down this debt. I don’t see this as a problem personally but it will be a must to help get our debt down. I, like anyone, don’t like higher taxes, but I think everyone knows, you can’t just keep spending and borrowing. That's a big Duh. Keep in mind coming out of the War Years, in 1950, our debt to GDP was @ 90%. So this is not unprecedented and can be corrected. That’s the hope but I don’t usually consider hope a strategy. We do though need to do some belt-tightening here and I think it will happen (regardless if people whine about it or not).

Jan 10 11:42 AM

[sl62:]

I agree that things are in a mess right now. But as said, I think at this point "the world" accepts and supports America as the hub--we are the sun and the rest of the world are revolving around us. They know that if America falls or crashes and burns, they are going to be in a world of trouble because if we are f'd up, they are twice that (or at least incapable) and no where near ready for the responsbilities America has taken on. We are the glue and I would call us "too important to fail". Certainly figuratively and perceptually (and as represented by how popular our currency is around the world). Further, I think they have no problem letting us be the center of the universe because it enables them to be able to do their thing without too much attention. And because of how other governments are set up as communist, et al, they know they can never even BE the center...yet they are still comfortable with their traditions and age-old ways of life. So on that thesis, I believe that the rest of the world will in the future be willing to do "whatever is necessary" to keep the current structure viable…or at least palatable so that the world can keep turning. Our consumption does make a huge difference to the world yet at the same time we need to still be constructive in the way we take on debt (or pay it down) Your points are all valid and I don't dispute them on the face but there significant challenges with the genie out of the bottle (without our standards and with heightened global interactivity). It used to be Us and Them. Now it’s We, All of Us. As said, if anything, I see the global scene melding--the opposite of continental drift. It's the world coming back together toward Pangea, not physically, not ideologically but in further connectivity and interactivity. Which one day in the next 100 years could solidify more than any of us could imagine. I think we will keep finding ways to work together worldwide to create almost a "world manufacturing hub" that all countries utilize in a fiscally additive way rather than subtractive. There are 6B in the world and only 300M here. So between those numbers and that other parts of the world are far behind us in their development, it makes sense that manufacturing has gravitated to those places. I suggest that this timeframe right now through about the next 10 years is a restructuring of how the world interacts. And there will continue to be growing pains (like we are seeing right now) until the new paradigm is in place. Once and if settled positively, it should be able to properly support world economies for the forseeable future.

Jan 10 12:04 PM

[AmIBankrupt:]

Does any one realize that XM radio is on every flight of Continental Airlines, that siriusXM being played in every airport COACH bus in MA, that most GAS stations in MA and N H are playing XM radio while you'r pumping gas, that SHAWS and stop & Shop in MA playing sirius radio to customers.

If marketing would use these models and expand their base, it may help a little.

My question is: Does MEL do IQ check on his Marketing employees?

Jan 10 12:25 PM

[mollytjm:]

we need people to understand the nature of 'credit'. that's what got us into this mess...banks eager and seductive with low interest rates and 'pre-approved' credit cards mailed daily to your mailbox. this lulled people into thinking they had to have everything ...NOW. well, that won't work..it never really did but we have the proof.
as to radio, i think Apple will eventually team up with someone or do their own...right now there are radio apps for the touch and phone and i can listen to any kind of music i want.
car companies are making their cars ipod/phone/gps compatible or already onboard. but i don't think the Zune warrents a mention in the same sentence as the iPod and i think you'll see the car people heading in droves toward iPod compatable.

Jan 10 01:18 PM

[relmor:]

America is a consumer, that is their part in the world. You make it, well buy it. But we give nothing back for the goods we consume. We give back ever decreasing valued dollar assets, that has lost over 92% of its purchasing power. That is a trend, and leads to 0. Forgiving our debt is one thing, but as they shift products towards other markets, more responsible countries that dont just print toilet paper, the need for us to consume will drop less and less. You bring up a good point, sl62, we are only 300 million people, a small number. We can be replaced. What do we do? We buy a product we can afford(low intererest rates, free money, overpriced jobs that dont support the bottom line, etc..) and use it. They make it, we use it. Anyone can use it, the power is in who makes it. It always has been, and always will be. What were we to get to such a huge world power in the 1970'/80's. It wasnt because we were the most technological(we became the most technological by having the most money(work units) of any other country. We PRODUCED more than we consumed, and made a profit. We loaned this money out, now we are the borrower. Who do you think is going to be better off in the long run, JP Morgan, or the people who owe JP Morgan? I think you know the answer to that. Yes, I was referring to the upper middle and even the middle class now that use services they never really could afford. All those service industry jobs are gone, and will not come back. From there you have suppliers who dont get as much business, and it trickles down throughout our 70% service based economy. Our 30% of real GDP cannot support our lifestyle, now that we have like you said "let the cat out of the bag". It wont buy us what it once did, and inflation will make it even harder to afford anything beyond energy, food, and clothing. Just like in the old days, when we were on the gold standard, and 90 percent of the population could only afford the things Ive mentioned. The last 10 percent that will be "rich" cannot support a service economy. We then will have to start making products here again, from our houses, small shops, and sell to the local market(China will not bother selling cheap tvs to a country when they can get more at another. There will be fewer tvs around, therefore it costs more to ship smaller units(they will eventually be expenive to us like they are expensive to lets say someone who lives in China 10 years ago, or today. But in 10 years those TVS will be dirt cheap to them. Keeping their economy going, while ours suffers. There is one hitch...And it was our problem(we produced so much here we need to import energy, supplies, materials, etc...which means you need a good foreign policy.
Our foreign policy to handle this problem was to set up a hundred fake governments throughout the world that would supply us with what we needed cheaply, and 700 military bases to back it up(nukes dont hurt either). But we got greedy, and shipped too many jobs and our way overseas, and here we are today. Now dependent on the world, instead of the world johnsing for american products. We have technology companies here, top notch, thats good, but that can be stolen and bought away, and engineers are like whores, they can be bought at any price.

Jan 10 04:50 PM

[Stock till ...:]

Also a lot of retail shops no longer play "elevator music", they play channels from Sirius XM. I hear Sirius channels in grocery stores nowadays.


On Jan 10 12:25 PM amibankrupt wrote:

> Does any one realize that XM radio is on every flight of Continental
> Airlines, that siriusXM being played in every airport COACH bus in
> MA, that most GAS stations in MA and N H are playing XM radio while
> you'r pumping gas, that SHAWS and stop & Shop in MA playing sirius
> radio to customers.
>
> If marketing would use these models and expand their base, it may
> help a little.
>
> My question is: Does MEL do IQ check on his Marketing employees?

Jan 10 05:52 PM

[Come on Guy...:]

Remlor,

Have u seen the movie Zeitgeist, and the new one Zeitgeist Addendum? It pretty much lays out how everything works in this world. Good movie

Jan 10 09:42 PM

[nikita:]

AT&T CruiseCast, satellite TV for your car, featuring breakthrough mobile video satellite technology and a great range of in car entertainment

Apr 05 07:14 PM