By Steve Garcia
Lately, there seems to be an awful lot of chatter in the media about how successful streaming internet music services are going to be such as Pandora and Spotify. The media even goes so far as to say that this will be a detriment or lead to the demise of Sirius XM (SIRI) radio, but they are missing a huge point with Sirius XM. The satellite radio company has made internet streaming of the service a part of their model, and has included exclusive content such as Howard Stern in some of its internet packages. This has made Sirius XM internet not only a must have for exclusive content in the satellite realm, but for internet based streaming as well.
As the Sirius XM model continues evolving, it seems quite clear that tiered programming based on the amount of advertising a listener is willing to put up with is on the horizon. Theoretically, you could have a $12.95 premium version of Sirius XM internet, a $10.95 version with let’s say 5 minutes of hourly advertising, another tier based on 10 minutes at $8.95 and so on. The beauty of this model is that it would allow people who see paying $12.95 for a service as too steep a price to listen at more palatable price points in relation to other competitors in the space such as Pandora, who don’t have anywhere near the variety of content.
Additionally, because Sirius XM has a strong base of subscriber consumers who have generally more discretionary dollars to spend, and a program lineup that reads like a who’s who in the media space, advertisers would seem to want to gravitate to Sirius XM to spend a good portion of their money on ads that will generate interest from the very people who have the majority of money to spend.
So while internet based services may be the new hot commodity, assuming that it hurts Sirius XM is a stretch if it is anything at all. The merger of the 2 US satellite radio companies has created a dynamic with tremendous potential upside that is starting to deliver on its promise, and is in the midst of potentially expanding its offerings at more affordable pricing for even the most cost conscious consumers. The future of internet radio does indeed include Sirius XM radio in the mix. Who are the contenders, the pretenders and the competition? We would love to hear your opinions.
Disclosure: Long Sirius XM