Are There Enough People Willing to Keep Paying for Sirius Content?

By Gino Lattarulo

While all of us so called experts obsess, analyze, and give opinionated comments about the success or demise of Sirius (SIRI), I think there is a single question that should be considered above all else. Are there enough people willing to continually pay for radio as they do cable TV? As one of the people who is willing to pay for it, and I mean forever, let me tell you why I can never go back to terrestrial radio. It boils down to one single factor; I don’t have to worry about losing content because I am too far from the transmitter. That’s it. Whether I am in NY or LA, I get the same station 24/7. Now what about other people? What winds their clock to keep them paying for it? Take sports fans for instance. If a Giants fan lives in Florida, terrestrial radio is out. Even in upstate NY you have to mess around with 40 different A.M. stations to get continuous coverage.

A lot of naysayers are condemning Sirius because of available free music via sites like Pandora and Grooveshark. In truth, I love both of these sites but free Internet music is not the death of satellite radio. Not even close. Music is only one part of the satellite model. You might as well say that free Internet music will kill terrestrial radio because of the high cost of advertising. Not going to happen. Because believe me, Internet radio may be free to the public, but it takes major revenue to pay ASCAP and BMI music royalties. Do not be surprised if you see those websites with their hands out looking for subscriber dollars in the future.

So we are back to the question. Are there enough people willing to consistently pay for the content that Sirius provides? Once the auto industry gets back on a steady path I think there definitely will be more than enough. Now, whether or not subscription rates will remain the primary source of revenue is a different story. It would not shock me in the least if Sirius changed the landscape a bit and adopted the Time Warner (TWX) and DirecTV (DTV) model by using both subscription dollars and advertising to pay for premium content. With all the content Sirius has, maybe ‘ol Mel can also start thinking about syndication resales.

Like anything else, it boils down to how much someone will or will not pay to obtain a product. I would never pay over $50 for a pair of sneakers but have no problem shelling out $200 dollars for a pair of shoes. I own a $150 pair of sunglasses and a $10 watch. $450 for a Playstation 3? No problem. You want HOW MUCH for that cell phone?? Forget it, I’ll buy one on eBay and swap the sim card. I would never pay what they are currently asking for an iPhone because I have no interest in cell phones over and above their basic function. I always take whatever free phone comes with the subscription. But that is just one person’s point of view. Obviously the iPhone is a successful product. Otherwise Apple (AAPL) would not be moving them faster than a Miami drug dealer sells yayo.

The point is that when it comes to commerce, it is all about what is important to a particular person that determines how much they will pay for a product. Many people are adamant about refusing to pay for satellite radio when they can get free music on the Internet. Others like myself pay for satellite radio because of specific content. That is what makes diversity so great. Siri just needs to find the best way to grab their chunk of the 300 million people in America to achieve what every company longs for: Growth.

Disclosure – Long SIRI, no positions in AAPL

Comments

[Mr. Stupid:]

Thank God I sold at .45. This stock's a DUD. I just cancelled my subscription because I was running out of money for my Starbucks. I have pandora through my Ipod anyway and just hook it up in my car if I want to listen to it.

Sirius is just a toy, not a necessity so i don't see it strengthening subs down the road.

People need to ride a bike more and get out of the car. Lose the weight.

Frank

Jun 12 05:27 PM

[mlongj:]

The auto industry will come back soon. The "cash for clunkers" has passed the house and is being pushed through in the senate. The fact of the matter is as long as cars are sold with satrad, there will be a certain percentage which will choose the premium radio service. We are approaching a time when all cars have satrad, as terrestrial stations will become obsolete, like the newspapers, and listeners will have no choice but to pay. The future is very bright for this company, but the time is not quite yet for the stock to rise. For all the ones that bash the company and its leadership, you are entitled to your opinion. However, it should be noted that there is very little downside at .35. Furthermore, Liberty will shield SiriusXM until it can show more profitability, which is just a quarter or two away. There is time to consider the options for management, and now that Liberty has assumed their seats on the board, it should be a great second half of 2009. There will always be enough people willing to pay for the car audio experience that SiriusXM brings to the table.

Long SiriusXM

Jun 12 09:40 PM

[Jerrold Wil...:]

The company seems to finally realize that they can not rely on selling subscriptions through cars. Most people arent willing to pay premium prices for entertainment only in the car. People think pay for radio for a 1-2 hour commute a day? That would not be reasonable for the average person. However, now when they have service available on smartphones, people can have great audio at work, at the gym, riding their bike or walking down the street. I am a commuter by bus and train, so I listen to it about 3-5 hours a day. It is definitely worth about $3.00 a week. I spend more on donuts and coffee a week. The problem in the past has been, people would love to have a portable device, but Sirius XM costs were way too high. Thw Stilletto and XMP3 are out of peoples price range. Only a few would spend close to $200.00 then have to spend $12.95 a month. Only true "geeks", like myself would do that. Now, with smartphones having the capabilities people can join without the big upfront cost. Or just try it out and get hooked like i did.

Jun 13 11:01 AM

[Mr. Stupid:]

Why pay for a prostitute if I can get it for free so why pay for Sirius if I can get other media options for FREE?

HEHEHAHA


Frank


On Jun 13 02:28 AM Jesus wrote:

> If Sirius was a girl I would Marry her, i just cant live if I dont
> have Sirius in my life and she also gives good head. Pandora Is the
> neiborghood slut that gives it for free to everyone.

Jun 13 02:56 PM

[Jesus:]

I just want something clean and new Pandora sucks Its not worth its free service. Plus I would not marry Pandora I would just bust a nut on her face and Fu>>k Her sister.


On Jun 13 02:56 PM Mr. Stupid wrote:

> Why pay for a prostitute if I can get it for free so why pay for
> Sirius if I can get other media options for FREE?
>
> HEHEHAHA
>
>
> Frank

Jun 13 07:23 PM

[Jesus:]

Pandora Is like MR. Stupid Little and Useless and probably dont get no ass.

Jun 13 07:27 PM

[The-Stock-M...:]

In a bad economy, folks are cutting back on things are not a must. This includes cable, landphones, and probably satellite music too, except for the stead-fast listeners. A part of satellite radio growth also came from factory-built options on many of the cars. The huge slowdown of auto-industry, coupled with individual subscription cutbacks in a down economy probably doesn't bode well for satellite radio - monopoly or not. jmho.

Jun 13 08:45 PM

[CoolHead:]

Relmar2003, Where are you? Did the bashers get you? Miss seeing your comments.

Any opinion about this article? It seems like the group has gone off topic for now.

Jun 14 03:27 PM

[CoolHead:]

Relmar2003, Where are you? Did the bashers get you? Miss seeing your comments.

Any opinion about this article? It seems like the group has gone off topic for now.

Jun 14 03:27 PM

[CoolHead:]

Relmar2003, Where are you? Did the bashers get you? Miss seeing your comments.

Any opinion about this article? It seems like the group has gone off topic for now.

Jun 14 03:27 PM

[Mr. Stupid:]

WOW! YOU'RE SO INTELLIGENT

LOL



On Jun 13 07:23 PM Jesus wrote:

> I just want something clean and new Pandora sucks Its not worth its
> free service. Plus I would not marry Pandora I would just bust a
> nut on her face and Fu>>k Her sister.

Jun 14 05:47 PM

[Jesus:]

Thanks Mr stupid
I Know Im Intelligent you dont have to tell me ... Mr stupid is the perfect name for you, Jerk off..Tell your Mama I said Hi .
Pandora Sucks


On Jun 14 05:47 PM Mr. Stupid wrote:

> WOW! YOU'RE SO INTELLIGENT
>
> LOL
>

Jun 14 07:56 PM

[jmsithy:]

you didnt sell it at .45 you sold it at .37 and .36 the last time it went up like a short seller you are too bad you are about to lose the windfall, but that is why they call you Mr. stupid always looking for the short term and always worrying like Chicken little when the sky is falling (what should I do) (what should I do) (is there bad news that the apps is not coming out)(is Jay boy billy right?)(should I sell?)( I did not make my fortune is 3 weeks this looks like a dud stock)


On Jun 12 05:27 PM Mr. Stupid wrote:

> Thank God I sold at .45. This stock's a DUD. I just cancelled my
> subscription because I was running out of money for my Starbucks.
> I have pandora through my Ipod anyway and just hook it up in my car
> if I want to listen to it.
>
> Sirius is just a toy, not a necessity so i don't see it strengthening
> subs down the road.
>
> People need to ride a bike more and get out of the car. Lose the
> weight.
>
> Frank

Jun 14 08:34 PM

[Mr. Stupid:]

You don't come off as intelligent at all.

Let me guess. You're playing dumb.

LOL


On Jun 14 07:56 PM Jesus wrote:

> Thanks Mr stupid
> I Know Im Intelligent you dont have to tell me ... Mr stupid is the
> perfect name for you, Jerk off..Tell your Mama I said Hi .
> Pandora Sucks

Jun 14 11:47 PM

[Mr. Stupid:]

You're MANIC.....hahahahaahah yeyeeyeye hahhahahha yeyeyeyyey

What's all that jibberish?

LOL


On Jun 14 08:34 PM jmsithy wrote:

> you didnt sell it at .45 you sold it at .37 and .36 the last time
> it went up like a short seller you are too bad you are about to lose
> the windfall, but that is why they call you Mr. stupid always looking
> for the short term and always worrying like Chicken little when the
> sky is falling (what should I do) (what should I do) (is there bad
> news that the apps is not coming out)(is Jay boy billy right?)(should
> I sell?)( I did not make my fortune is 3 weeks this looks like a
> dud stock)

Jun 14 11:50 PM

[Mr. Stupid:]

Face it people, Sirius is done. DONE.

So many gadgets have come and gone and now it's Sirius turn.

PANDORA ROCKS!

Jun 14 11:53 PM

[relmar2003:]

Is there more than one Mr. Stupid? Otherwise if its one guy, he had mulitiple personalities. Im right here.
Not really sure the point of the article, why I didnt comment on it. And I havent met a basher yet that could run me off, let alone have an intelligent response. Gino says some truths. Raises questions to consider 10 years ago. These things have been answered already.

Jun 15 03:38 AM

[jmsithy:]

it is kind of strange that Mr. Stupid thinks that he knows this stock all of the sudden just after a few weeks of spewing words of whinning and not knowing what he should do


On Jun 15 03:38 AM relmar2003 wrote:

> Is there more than one Mr. Stupid? Otherwise if its one guy, he had
> mulitiple personalities. Im right here.
> Not really sure the point of the article, why I didnt comment on
> it. And I havent met a basher yet that could run me off, let alone
> have an intelligent response. Gino says some truths. Raises questions
> to consider 10 years ago. These things have been answered already.

Jun 15 08:53 AM

[Mr. Stupid:]

Lot's of intelligence in your post there. I guess when you said you were intelligent this is what you mean.

hahahah heheheehe hahahah heeheh



On Jun 15 01:14 AM Jesus wrote:

>
> Hey Mr Stupid ,
>
> Did Mel Fu..kk your mom too that is why you hate Sirius so much<Did
> Mel forget to pay child support..You Fu..ken Nerd!!!

Jun 15 12:32 PM

[CoolHead:]

Good to see you back after a hiatus of a week Relmar2003! The bashers have been going crazy without you to keep them in check. You are right about the article, old news.....
SIRI is getting back to a good buy price at $0.32. I bought some more share again today.
Say hi to Cos1000 for me, will 'ya?


On Jun 15 03:38 AM relmar2003 wrote:

> Is there more than one Mr. Stupid? Otherwise if its one guy, he had
> mulitiple personalities. Im right here.
> Not really sure the point of the article, why I didnt comment on
> it. And I havent met a basher yet that could run me off, let alone
> have an intelligent response. Gino says some truths. Raises questions
> to consider 10 years ago. These things have been answered already.

Jun 15 11:06 PM