By Steve Garcia
Once again this week, Sirius XM Radio (NASDAQ:SIRI) has borne the brunt of some bad writing and less than accurate information from the likes of several “Financial News” sources on the internet. The death of satellite radio as we know it has been an ongoing source of comic relief to any investor who is worth their salt and does even a small amount of research, including reading some SEC filings. Fomented lies about satellite radio may grab some sensational headlines but they do not give a true and clear picture of what satellite radio is or whether they truly have any direct competition.
Allow me to help clarify the picture for those of you out there who have not been following for the last 10 years. Satellite radio is here to stay, having survived the onslaught of negativity from multiple media sources and a merger which became prohibitively expensive to finalize, as well as the economic meltdown of 2008-2009. That said, Sirius XM, which is the company resulting from the merger of Sirius satellite radio and XM satellite radio (once two very distinct satellite radio companies), has spent the last year and a half shedding a lot of excesses, duplicity of effort and cost as it streamlines and transforms into a much leaner and stronger company.
Those who know little, or at least pretend to, love to tell a sad tale and paint a rather dire picture of satellite radio’s future. However, allow me to inform you that satellite radio has been “competing” with internet and terrestrial radio over the course of the last decade or so. In that time, it has managed to carve out a “nice little subscription model” all its own with over 130 channels of music and premium content like Howard Stern, Opie and Anthony, The Playboy channel, The NFL, NHL, MLB, College Sports, Oprah Winfrey, Martha Stewart, Rosie O‘Donnell, Jamie Fox’s Foxhole, Mad Dog Radio, Eminem’s Shade 45 and so on. I have yet to see anything like this package of offerings available anywhere else. Pandora, Slacker, IHeartRadio etc. etc. are all just music, which is fine, but not a real threat to satellite radio. It’s like my father used to say “that’s like comparing apples to oranges” - both are good but different.
Incidentally, I find it quite interesting that data streaming charges are always left out when discussing internet radio through a cell phone. Perhaps that is because it makes the “free” case not so free after all. I personally have tried Pandora and have two of those 60 million subscriptions…free ones of course, and I can tell you from my own personal experience, the novelty wears off in less than a day. I usually find myself going back to Sirius XM whether it is in my car, in my yard listening to my XMP 3 or in my house listening to Sirius XM online through the internet version of the service, (oops, did I just say internet version of the service - which is also available for streaming on all smart phones with a subscription). Sirius XM has my musical and audio entertainment choices covered.
In closing, a little information can go a long way to alleviating any unsubstantiated fears about satellite radio and its now 10 year impending demise. If you are not familiar with the service or the product, now is a great time to get acquainted with it. Sirius XM is here to stay and so are its subscribers. Company metrics suggest that they are experiencing healthy and steady growth as well, but don’t take my word for it, check out the last several quarters of pure and simple growth in their filings right here. Verified facts always trump speculative opinion. The more you know, the less snakes and charlatans can deceive you in your decision making.
Disclosure: Long SIRI