In August of last year Sirius XM Holdings (NASDAQ:SIRI) announced the hiring of Eddie "Piolin" Sotelo to host a Spanish language 4-hour morning show to try and capture a portion of the Hispanic market. To help promote the October launch of his show, Sirius announced an extended free trial to a suite of 10 Hispanic themed, and Spanish language, channels. The trial would run through February 15, 2014, after which the monthly rate would be $5.99.
It's clear why the company would like to penetrate the Hispanic market. In 2010 the US Census reported there were more than 50 million people of Latino or Hispanic origin in the US. Some reports estimate that as many as 35 million speak Spanish at home. It's a large market and one that the company feels is important enough to dedicate 10 channels.
The hiring and free trial was followed by another press release in early June announcing a "Major "Piolin" Event in Houston: "Piolin's Jugada Musical"". Earlier today, the Los Angeles Times reported that Piolin's show had been canceled. Apparently neither the free trial, the $5.99 package nor the Houston event were successful enough to warrant keeping Piolin.
This should not have been too much of a surprise to those that read a previous article published on Seeking Alpha that suggested Sirius's attempts to penetrate the Hispanic market segment were falling short of expectations. The presumed shortfall was based on some evasive comments by CEO Jim Meyer. Back in February, when Meyer was asked "And one of the offers you announced last year was this Spanish language offer. Maybe you can give us some color?", he responded:
The Hispanic segment is one that I personally have had a bugaboo about why we can't do better. And over time, I think we can, and that opens up a different opportunity to us, that may be a lower ARPU, but certainly a profitable profile for us.
Scott [Greenstein], do you want to comment?
Greenstein didn't care to comment, at least not on the status of the trial. More recently, the topic came up again on the Q2 conference call. This time in response to the following question by John Tinker of Maxim Group "Could you give us an update on how your targeted service to the Hispanic community is going?", Meyer replied:
Well, so I would say we're still developing it. As you know, we ran a major promotion in a month in the second quarter in Houston that was 100% Hispanic focus. It involved a lot of talent. It involved a mix of car dealers and individual subscribers. I'd say it's too early to be able to give you any kind of meaningful data there yet.
Whether any meaningful data came out of that event over the past two and a half months or not, there wasn't enough to help Piolin. And, while the company is still "developing" its plans for the Hispanic market, Piolin will apparently no longer be part of those plans.
Disclosure: The author is long SIRI.
The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: In addition to my long positions, I have January 2015 $4 covered calls written against portions of my long positions in Sirius XM. I also trade blocks of Sirius XM on a regular basis.