New Revenue for Sirius Can Come from Creative Places

By Brandon Matthews

Imagine that you’ve worked all day long. It begins to rain hard as you make your way to your car in anticipation of going home after a brutal day at work. You arrive at the place you recall leaving your car that morning, only to find out that it is gone. The police inform you that they will do their best, but we all know what that means. We’ve all seen COPS. The story at best will not end well for you in most cases.

Sirius XM Radio (SIRI) recently launched a new high powered satellite into orbit. Reports are already coming in that Satellite Radio signals are being picked up in places that they never were before; in basements, in garages, under trees and overpasses. With this in mind, I looked for information regarding the newest addition to Sirius XM’s satellite constellation. Funny thing about a 10Q filing is that it can read like a bible; always providing a different message depending on what the reader seeks to find. I must have passed over this little gem a dozen times:

“We will incur significant capital expenditures to construct and launch our new satellites and to improve our terrestrial repeater network and broadcast and administrative infrastructure. These capital expenditures will support our growth and the resiliency of our operations, and will also support the delivery of future new revenue streams.”

That last line cannot be ignored. Ongoing speculation has been that Sirius XM’s newest technological wonder dubbed Sirius FM-5 may offer anything from an On-Star type of product to GPS offerings. Still others look at the potential of mobile television. I would like to suggest a different and more practical approach that can be instituted nearly immediately by the company.

One of the most antiquated systems in any vehicle on the road today are the theft deterrent systems. Most are useless in that they require the vehicle owner to take some kind of action, from installation to simply activating the alarm. People become complacent, and the stolen car industry thrives. I suggest that Sirius XM’s technology places the company in a unique position to offer a new and improved version of LoJack. A nationwide tracking system that can aid law enforcement in the immediate location of any stolen car on a nationwide scale, producing immediate results.

As for the likelihood of such a new potential revenue stream becoming reality, we need to look at past endeavors. Experience teaches us that Sirius XM develops new products primarily at the urging of their OEM partners, such as “Back Seat Television” developed at the request of Chrysler, or the Ford (F) SYNC system now available in Ford vehicles. On Star in fact already offers this feature, but its exclusivity to General Motors provides an exceptional opportunity for Sirius XM to offer a competing product or service and in my opinion, provides the incentive to do so.

Position: Long SIRI

Comments

[R A F:]

Despite the obvious manipulation of SIRI on the downside yesterday afternoon, lots of positve good things for the company continue to come on stream at this time. I remain convinced that the truth of these positives will ultimately overwhelm the negative and false manipulation that persists and the stock will remain technically strong over the intermediate to longer term. The Apple earnings and guidance release yesterday reported blowout figures for the iPhone and iPod touch, and also projected spectacular growth into the future for these platforms. This can only be a major plus for SIRI going forward. The company is obviously now marketing this relationship more aggressively - yesterday I saw another extremely well done and eye catching billboard on the New Jersey Turnpike approaching Manhattan: "Sirius XM Satellite Radio is now available on your iPhone and iPod touch." All details were provided, the artwork was excellent, and there is no doubt this type of marketing is going on in major cities across the nation. Despite all the doubters, anyone who has had access to Sirius and become addicted to the great variety of content, will recognize the value of adding this App to the iPhone at the moderate subscription cost that is required. The potential for substantial revenue growth into the future is real and will be recognized. Likewise, the re-emergence of potential within the auto fleet through all recent developments - new relationships, also including pre-owned cars, etc. - and new possibilities such as the ones noted by Brandon above, all bode well for SIRI into the future. Stay the course - upside potential remains significantly greater than downside risk.

Jul 22 07:37 AM

[SIRI-Doom:]

BUNK

Sirius XM develops new products primarily at ....

Last stitch effort
Last on the buss
After it is too late...

Oh boy, 3 channels of back seat TV released 3 years ago... And we all had such hole that Malon would kick Mel's but in gear.... Anything yet? NO

The only inovation from SIRI is the sufistication of the computer used to manipulate the stock market...

Jul 22 07:46 AM

[Jerrold Wil...:]

i love my xm radio and I am an investor as well. However, the idea that they will start some type of Lojack system is kind of silly. Sirius XM needs to focus on their radio content and more ways for people to access their content without interuption by buildings, trees, etc. Adding a Lojack type system would require more expensive instalations into vehicles that is just not realistic. If the company wants to do something new with their satelites, they need to be creative and actually do something new. Not copy a dying technology like Lojack. The recent billboards have been eye catching. I have noticed 2 in the NYC area. These will do a lot to give the company exposure. Although, the ads show an iphone to attract peoples attention, i feel people will start to know the sirius xm brand and willing to pay for radio if they get the opportunity. Meaning, not have to buy expensive hardware.

Jul 22 09:28 AM

[noendinsight:]

Siri-Dumb what is your problem? From what I can gather you post non-stop just so no one will want to read SIRI news anymore.

Jul 22 10:18 AM

[Bababooie:]

Geeez,
A newly launched satellite means nothing? I will not confuse you with paraphrasing. From the Gunters space page:
space.skyrocket.de/ind...

"The satellite will be one of the most powerful ever constructed, with end-of-life power capability at more than 20 kilowatts. Sirius FM-5 is based on SS/L's flight proven and reliable LS-1300 platform and will have a specified service life of 15 years. It will carry a range of technologies, including a 9-meter unfurlable reflector, which will allow for highly-concentrated transmissions to small, advanced devices."

So what does the Phrase "highly-concentrated transmissions to small, advanced devices" mean to you? Probably nothing, as you can't see beyond things you can touch, smell, or see. Technology is advancing every day, and for the most part is not realized until later. Many features are ignored by self proclaimed experts on the topic. I am sure FM-5 will bring Sirius users new features over it's 15 year life span.


OH........
btw there is a SOPHISTICATED tool on the computer that is available to you.....

it's called spell check!!!!


On Jul 22 07:46 AM SIRI-Doom wrote:

> BUNK
>
> Sirius XM develops new products primarily at ....
>
> Last stitch effort
> Last on the buss
> After it is too late...
>
> Oh boy, 3 channels of back seat TV released 3 years ago... And we
> all had such hole that Malon would kick Mel's but in gear.... Anything
> yet? NO
>
> The only inovation from SIRI is the sufistication of the computer
> used to manipulate the stock market...

Jul 22 10:59 AM

[Jerrold Wil...:]

I have to agree with SIRI-DOOM about the companies recent innovations. The iphone app is good, but did it really have to take that long? And then piss people off by not having certain chanels such as Howard Stern. The backseat TV innovation was a good idea at the time, I guess. It was only for 1 vehicle and never promoted. Now with the ability to watch tv on cell phones or computers thru wi-fi, that idea is dead. Do they think everyone has an iphone or ipod touch? Most people have other smartphones than the iphone, why is it taking so long to make windows mobile and blackberry apps? The service for blackberry is the most ridiculous offer imaginable. I think it is $7.99 for 20 chanels! Even if you are a subscriber! That has been around for years, no innovation to update a plan that nobody would subscirbe to. The launch of another satelite is another expense that will need to be paid for. The company needs to :innovate" new ways to get subscribers, not new ways to spend money. Sirius XM needs to get to the point where just about anyone can try their service without any upfront cost! In a few years, most or just about all vehicles will have the radio installed. Now they need to focus on all mobile devices having the ability. Are the people at Pandora that much smarter or quicker thatn the people at Sirius XM, when a new phone comes out such as the Palm pre, they are right on it! The new Itunes shuts out Palm Pre users, Great opportunity to get Palm pre users to try Sirius XM and forget about downloading music from itunes!! Why not innovate and allow the palm pre to work like the xmp3 where you can record songs or shows on your device. That would really get subscribers, and maybe even Palm would pay to be a part of a service like that! Mel K, I expect some news Aug 3rd. We need some innovation, not the same old stuff!

Jul 22 11:47 AM

[Wolf Child:]

You don't have a day job do you?

Or friends?


On Jul 22 07:46 AM SIRI-Doom wrote:

> BUNK
>
> Sirius XM develops new products primarily at ....
>
> Last stitch effort
> Last on the buss
> After it is too late...
>
> Oh boy, 3 channels of back seat TV released 3 years ago... And we
> all had such hole that Malon would kick Mel's but in gear.... Anything
> yet? NO
>
> The only inovation from SIRI is the sufistication of the computer
> used to manipulate the stock market...

Jul 22 02:13 PM

[Atypical:]

The comments recently about billboards appearing reminded me of Mel's early career. I believe he ran a company that was heavily involved in billboard advertising. If correct he certainly knows the business and how to maximize it. Perhaps there are more aspects of his background that we will now get to see in action. I hope.

Jul 22 02:54 PM

[SIRI-Doom:]

SIRIUS XM Radio to Announce Second Quarter 2009 Results
Company to Webcast Earnings Call for Investors and Media

Press Release
NEW YORK, July 22 /PRNewswire-FirstCall/ -- SIRIUS XM Radio (Nasdaq: SIRI - News) today announced that it plans to release second quarter 2009 financial and operating results on Thursday, August 6, 2009.

Jul 22 06:09 PM

[Jerrold Wil...:]

I have been noticing a lot of online sirius xm ads for the Mirge. This is another example of the "innovation" of the company. Can someone explain what is the purpose of the merge once most of the chanels were combined? Sirius music chanels are the same as the XM chanels. You can get the "best of" package to get premiuum chanels off the other network. I understand that sirius subs cant get baseball. But, why not just get an xm radio with best of Sirius and I think you get all chanels of both networks. What would I gain with merge over a xm radio with best of? anyone know?

Jul 24 11:43 AM