AT&T: Does Sirius XM Have a New Competitor?

This has been flying a little bit under the radar, but yesterday AT&T Services Inc. (T) and RaySat Broadcasting Corporation launched AT&T CruiseCast after a slight delay due to the GM (GMGMQ.PK) bankruptcy announcement.

The significance of the launch is that Sirius XM Radio (SIRI) is no longer the only satellite radio provider in North America, less than a year after the merger between Sirius and XM satellite radio.

AT&T CruiseCast will offer 22 satellite TV channels and 20 satellite radio channels. The AT&T CruiseCast service comes at a steep price at $1,299 equipment cost and the monthly subscription fee is $28. Because of the steep initial set up price, initial installs may be slow until equipment cost and prices come down.

Let's take a closer look as to why the AT&T launch could potentially be a big deal for Sirius XM Radio.

1. Sirius XM Radio offers a BackSeat TV offering for $6.99 that displays cartoons in back seat of Chrysler vehicles. The AT&T CruiseCast 22 satellite TV programming shows much more than cartoons with a greater variety of channels from kids and family, documentary, music, comedy, news, and sports programming. With the current strategic partnership between Sirius XM Radio and Liberty Media (LINTA), we can possibly expect in the future for Sirius XM Radio to beef up its back seat offering due to Liberty's relationship with DirecTV (DTV). This is total speculation but it makes sense. The Sirius XM BackSeat TV offering could then have more offerings than just cartoons and be available in more vehicles than just Chrysler vehicles. This could potentially then make AT&T CruiseCast and Sirius XM Radio direct competitors in the in car TV space. Sirius XM Radio could then potentially have an advantage due to its existing relationship with car manufacturers. AT&T CruiseCast still needs to develop relationships with car manufacturers. Sirius XM Radio obviously would need to evaluate bandwidth considerations in any potential offering.
2. AT&T CruiseCast currently offers 20 satellite radio channels as part of its launch offering. In the future, a company like AT&T potentially has the reach and resource to decide to bolster its satellite radio offering on CruiseCast making it a more direct competitor in the satellite radio space to Sirius XM Radio. Sirius XM Radio currently offers over 150 channels so AT&T would have to do a lot of bolstering but it’s amazing that in less than a year after the merger between Sirius and XM Radio a new satellite radio provider has emerged even if on a lesser scale.
3. AT&T CruiseCast recently worked out a deal with Crutchfield to offer the CruiseCast product on Crutchfield.com. Crutchfield is a good source because it can provide multiple options for TV headrests, etc. This shows that AT&T and RaySat are serious about getting awareness of its CruiseCast product out there.

Does Sirius XM Radio really have a new competitor? What do you think? If AT&T can figure out a way to get the initial equipment costs lower in the future, then it's possible that Sirius XM Radio will have some new competition onwards.

View the AT&T CruiseCast Channel Lineup here.

Disclosure: Author holds a long position in SIRI, no position in ATT

Comments

[Siriphone:]

Haha, a competitor...

Thats like saying the Bentley is now a competitor of Kia, are you freaking kidding me?

ROFL

Jun 03 07:28 AM

[Rad Sat Daily:]

Bentley and Kia are competitors. If I walk into a dealership and a Bentley and Kia are sitting next to each other and those are my only two choices and I had to choose one I'm walking away with the Kia because I cant afford the Bentley. LMAO

Thanks for the competition example

ROFL

Jun 03 08:07 AM

[underway:]

Interesting.....
Actually, AT&T entering the market is probably good. It helps validate satellite radio as a viable business, perhaps convincing the naysayers that Sirius XM is here to stay. If AT&T starts advertising, Sirius XM will benefit as it will adverstise more as well to show its advantages over AT&T. This will help draw more people into this market. Everyone wins!

Jun 03 08:16 AM

[Slickyboy:]

Where the true competition now and in the future lies is with content. That's going to be the case for both satrad and traditional radio. Right now Siri/XM kills the competition with its content and every day I personally discover new channels with great material. If only Siri/XM would focus some greater effort on advertising.......

Jun 03 08:22 AM

[sirixm:]

Hehe, I am assuming the author's example was given as a joke. Good humour. Just in case the author was not joking, here are two more examples:

A 100 meter sprint race between myself (13 seconds) and Ussain Bolt (the world record holder). We might share the same space but we're not really competition.

Or

AT&T and SIRI. They might share the same space but quite simply, they are not competition. Go SIRI Bolt.


On Jun 03 08:07 AM Rad Sat Daily wrote:

> Bentley and Kia are competitors. If I walk into a dealership and
> a Bentley and Kia are sitting next to each other and those are my
> only two choices and I had to choose one I'm walking away with the
> Kia because I cant afford the Bentley. LMAO
>
> Thanks for the competition example
>
> ROFL

Jun 03 08:47 AM

[Spiderman4:]

SirIus will be at $1.00 or more by year end...!!!!

Jun 03 08:54 AM

[wwmadison:]

Yeah, except in this case the Bentley cost less than the Kia, making the choice a slam dunk.


On Jun 03 08:07 AM Rad Sat Daily wrote:

> Bentley and Kia are competitors. If I walk into a dealership and
> a Bentley and Kia are sitting next to each other and those are my
> only two choices and I had to choose one I'm walking away with the
> Kia because I cant afford the Bentley. LMAO
>
> Thanks for the competition example
>
> ROFL

Jun 03 09:16 AM

[learn to think:]

I think SIRI has already cornered the market.It has all the content,all the major radio players Howard,Opie and Anthony,Mad Dog,Oprah.......AT&T has a looooong way to go!

Jun 03 09:16 AM

[shhhhh:]

If you were buying a Bentley, you just might want the CruiseCast just for the snob appeal. This does mean that SiriusXM will not be the ubiquitous product hoped for.

The more burning question is Kia is Europe, China, and Russia. Why not SiriusXM?

Jun 03 09:24 AM

[los:]

competitors...of coarse! Over the air radio for other than white noise is OK, but if you want to hear excellent content and talent Sat Radio is the only game in town. I guess this means that Sirius/XM doesn't have a monopoly any more. Sat radio is here to stay.

Jun 03 11:09 AM

[anti:]

Yeah but in this case the KIA costs more than the Bentley. So your rebuttal is flawwed.

Would you pay more for a KIA than a Bentley?


On Jun 03 08:07 AM Rad Sat Daily wrote:

> Bentley and Kia are competitors. If I walk into a dealership and
> a Bentley and Kia are sitting next to each other and those are my
> only two choices and I had to choose one I'm walking away with the
> Kia because I cant afford the Bentley. LMAO
>
> Thanks for the competition example
>
> ROFL

Jun 03 11:43 AM

[staticradio:]

Hopefully this will improve programming / song variety on Sirius XM... ;)

Jun 03 12:56 PM

[MrKnowItAll:]

this is al middle-ware. when wi-fi become ubiquitous, then you will get 1000's of web based music services available in your car.

The next 3 years belong to satellite, after that...bye bye.

Jun 03 02:06 PM

[candooman:]

Look back a few years ... remember the Motorola satellite phones? They died due the high cost and became BK. AT&T CruiseAast will go in the same direction for the same reason (not the parent company of course!).

Jun 03 03:20 PM

[zorro6204:]

I think the Sirius is about dead anyway. There are really only three types of content on their network:

1. Music. Why put up with someone's playlist, when I have hundreds of my own? An MP3 player is becoming a standard accessory, and docks anywhere. Even if you actually want to listen to a radio station for music, there are lots of alternatives.

2. Sports. Nice, but usually you listen local and want your own guys in your ear. Radio and internet feeds cover that.

3. Talk. For shock jocks, Stern and O&A are 1-2 on Sirius, Howie is getting ancient and bored, takes a lot of time off, and O&A will probably not be renewed next year, making a last stand online (the "A" part already has his own private show). Sirius quite obviously hates them, they promote Stern on their own channel! Those two shows can't be replicated and drove a lot of the subscriber action. The rest is plain jane stuff.

With wi fi the more obvious mobile technology, the whole idea of populating earth orbit with satellites is about done anyway. What's left is contracted content, but when Howie retires, Sirius won't have much left. Oprah? She does like one hour a week, that's not going to carry the freight.

Jun 03 05:45 PM

[NHFDSQD2:]

Brilliant--unemployment approaching 9% fast. Hmmm? Lets come out with a discretionary item that costs 6 times the initial setup as SIRI, and charge a monthly fee that is 2 and 1/2 times more for a lesser product. Good luck to you!
Most families I know that have back seat TV, have it for the cartoons, not Bloomberg or the local and national news.

Jun 04 08:51 AM