Sirius XM’s British Invasion

Yesterday was an interesting day for those invested in Sirius XM (SIRI). The stock began an amazing upswing which was met with some resistance following a Washington Post article that was written by an outfit called PaidContent.org. My initial reaction was to question who might have paid for such content to be published at that moment and I decided to look into it.

The article itself attempted to make a case for Sirius XM’s eventual demise at the hand of Internet Radio applications. The “About Us” tab at the company’s website reveals a web of media related industries. PaidContent.org is a subsidiary of ContentNext Media which is in turn owned by Guardian News And Media Limited.

My eye was then drawn to the websites sidebar, which included other business entities owned by Guardian News & Media. I was somewhat taken aback when I saw the words, GMG Radio! Clicking on that link reveals the following:

“GMG Radio is the UK’s third largest commercial radio group in terms of total listener hours. It operates 13 analogue stations and 24 digital services, primarily under the Smooth Radio, Real Radio, Century Radio and Rock Radio brands. The division also operates a number of websites.”

“GMG is a leading multimedia business. The diverse portfolio includes national and regional newspapers, websites, radio stations, magazines and B2B media. Our flagship is the Guardian newspaper and website. GMG is wholly owned by the Scott Trust.“

Guardian News is based in Santa Monica, California and New York City. The company covers the business of digital media, operating paidContent.org, mocoNews.net, contentSutra.com and paidContent:UK. The company website states the company’s belief “that in the near future, all media will be digital media.”

At this point it has become clear to me that the Washington Post is being used as a tool by this company which seems to seek its own agenda and is waging a preliminary war with Sirius XM. GMG Radio has a large established footprint in the UK and I would venture a guess that Sirius XM’s OEM contracts stand in the way of a new form of British Invasion. Although the National Association Of Broadcasters provides no member list, it’s a safe bet that Guardian News & Media is a member in good standing. I am at a loss as to why the Washington Post would allow this type of self serving “news” to be published on their well respected pages.

Position: Long Sirius XM

Comments

[I'm Not Jim...:]

Brandon: There's a tool at work all right, but it's not the Washington Post! Perhaps you saw this quote from Martine (also know as Martin) Rothblatt, one of the founders of Sirius.

"“There has been a huge growth in terrestrial alternatives,” Rothblatt told Fortune. “As we move from third-generation to fourth-generation cellular, there’s going to be ever more bandwidth available to distribute content totally via terrestrial cellular infrastructure. And that will leave fewer and fewer unique market attributes to satellite radio. Technologies have their ideal times and places, and in my opinion the better time for satellite radio was 10 years ago.”

Ahem, as somebody once said, "that's what I was saying"! Trade the current rally, go home a wiser and perhaps even richer man.

Mar 17 08:35 AM

[GetSIRI:]

I met a guy from the UK a while back at a pub watching Premireship soccer. After the match, we jumped in my car and headed to another pub. He couldnt believe what he was seeing in my Sirius unit. Thought it was the greatest thing ever. Flipped from station to station checking each genre of music, and even BBC network.

There is a huge untapped market in Europe, and the terrestrial radio powers that be are starting to quake in their boots there too.

Mar 17 09:21 AM

[User 360126:]

Its the same old story! Everyone is bashing SIRI attempting to keep the company down but in reality conventional radio is in danger of becoming obsolete. SIRI has its financing and is gaining critical mass and will be a cash cow in a couple of years if not sooner. Mix in video or direct tv content and the possibilities are endless!

Mar 17 09:22 AM

[GetSIRI:]

INJC - The time for satellite is not 10 years ago. When you can drive from state to state and not drop a call on your cell, call me. When you can get a strong WiFi signal while moving around call me. Satellite is still the best alternative to terrestrial and will be for a long time. Look at HD2 radio....what a joke that is.

Mar 17 09:27 AM

[I'm Not Jim...:]

getsiri: It's not either or, terrestrial or satellite. Neither is likely to exist in it's current format in 10 years. Just like the newspaper business which is not in a recession right now, but is going away permanently as something printed in ink that you hold in your hand.

User: sure hope you don't plan on watching that direct tv in your car while driving, which is currently the ONLY place that people use satrad in any appreciable numbers. As for cash cow, it's a cash cow with diarhea because it goes out even faster than it comes in.

Mar 17 09:53 AM

[sirixm:]

Good research on this one Brandon.

However, it is a shame if anyone would take too much notice of paid content. It could never be objective and therefore will always hold a bias in the writers favour.

Mar 17 10:12 AM

[Blah, blah,...:]

I think the conclusions reached by tracking the ownership back to a company that also owns radio stations in the UK is more paranoia than anything else, much like the idea that Jim Cramer was attempting to manipulate the stock price on behalf of Goldman.

I believe this company has a chance to thrive. But, at the same time, to say that anyone who disagrees has an agenda is a reach.

There is (was?) a satellite radio company attempting to operate in the EU. I think the patchwork regulation over there makes the FCC look easy in comparison.

Mar 17 10:27 AM

[Edster:]

Lets get continued positive news for a change. Give CEO Mel credit for his efforts. I am tightening my belt because I am expecting the stock to go over a dollar a share shortly. Mel's comments the other day gives me a lot of optomism. I have been a holder of the stock for four years and still am optomistic with no intentions to sell my 4,000 shares. A minor investment to say the least.

Mar 17 11:43 AM

[BigVinnie:]

Barndon,
You know what assume means. It makes an ASS out of U and ME.
Don't speculate, make sure it's concrete. I would of believed teh story more if it were clear channel, COX, or CBS radio.

Mar 17 11:47 AM

[bigRandy116:]

lets see......the NAB paid the legislaters to vote against the merger, altho 18 of the 20 that I researched have XM/SIRIUS in their cars and all but one are subscribers, the Washington Post-Motley Fool-and many members of the NAB are on the payroll of the same group, (when was the last positive article about XM/SIRIUS have you have seen from those three?), like I said before...PLEASE just report the news and STOP trying to create it for the purpose of your own interests.

Mar 17 01:12 PM

[cos1000:]

i'm not jim cramer.......... what a shame that your on the wrong side of this whole thing......

Mar 17 09:35 PM

[Enigma:]

Long live Sirius XM! I read a comment that sirius xm gets people passionate ,that is understandable.Think about it, if sirius xm wasn't a threat to the future of terestrial radio ,all this lobbiest and the corrupt institution called the FCC wouldn't have spend 16 months and millions of dollars to block the merger and practically destroyed this company . wake up america we are so far behind in technology compared with Japan and europe thanks to our own corrupt institutions.Let it be, The success or failure of Sirius XM will depend on the millions of subscribers and long term investors like me .

Mar 18 12:13 AM

[Roxieanne:]

Brandon , great research----I wondered about the same as you did---
"Yesterday was an interesting day for those invested in Sirius XM (SIRI). The stock began an amazing upswing which was met with some resistance following a Washington Post article that was written by an outfit called PaidContent.org. My initial reaction was to question who might have paid for such content to be published at that moment and I decided to look into it."

Thanks for helping us stay informed.

Mar 18 12:20 PM