When I had heard that Sirius XM (NASDAQ:SIRI) officially released the first offering in its 2.0 line to retail, I searched for stories about the development. At first I was surprised. All I could find were random articles from loyalist longs over-hyping what's known as Sirius XM Lynx. After retrieving the details, however, it's hardly shocking that the media took a pass on the "news."
The release of "Lynx" sits somewhere south of being a non-event.
When Apple (NASDAQ:AAPL) released iPhone 4s, stories poured in from every source and every angle. Amazon.com's (NASDAQ:AMZN) release of Kindle Fire nearly generated the same level of response. While it would be unfair to expect similar media coverage in relation to something Sirius XM does, it's perfectly reasonable to expect, at the very least, a sliver of the response. But, as of Thursday night, the only major media outlet to report on Lynx was Forbes via a Trefis article.
The reason why the media do not care resembles the same reasons why SIRI will always be a trader's stock, a penny millionaire dreamer's stock and, when all is said and done, a roughly $1.00 stock. The things Sirius XM does - Lynx being the latest example - lack even an iota of innovation.
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- Pause, rewind and play live content. It's TiVo (NASDAQ:TIVO) for audio, only about a decade too late.
- Love button. Amounts to a playlist builder. No need to elaborate.
- Start now option. TIVO for audio.
- MicroSDHC card (card not included). But you should have plenty of them lying around; sort of like AC Adaptors, landline telephone cords and twist ties.
Most of the remaining "features" - Xtra channels, Wi-Fi connection, mutli-touch display and impressive battery life - do what the ones I highlighted do. And that's little more than add value to the experience of current subscribers willing to plunk down $250 for another receiver.
And even if these features end up in-dash someday (you can use Lynx as a portable device apparently, therefore you can use it in-car), they remain wholly unimpressive and insignificant.
Simply put, consumers expect these "new" features. They're the types of things they take for granted. To come to the table with this - and nothing more - is nothing short of embarrassing.
The release of Lynx prompts silence. The reason sits at the heart of the long-term bearish sentiment I've voiced regarding Sirius XM for months. The company innovates in a vacuum. While 2.0, thus far and presumably going forward, might give current subscribers and SIRI longs something to get all euphoric about, it does not give most people any reason whatsoever to subscribe to Sirius XM. Everything 2.0 does is old news.
From Pandora (NYSE:P) to Clear Channel's (CCMO.PK) iHeart Radio to Last.FM to iTunes, you can do everything 2.0 lets you do with Sirius XM content for free or for a fraction of the cost with comparable, if not superior content. The argument that Sirius XM's content will make 2.0 a success does not wash. In fact, it's irrelevant. The Sirius and XM content lineups have each been around for some time. Lynx provides absolutely no reason for a consumer to make the switch to satellite all of a sudden, particularly when you consider the many other options available in the audio entertainment space.
Based on what I have seen from Sirius XM's 2.0 so far, I am even more concerned about the company than I was over the summer when I held a short-term long position. Sirius XM might be the least innovative company operating in its broad sector.
Recent releases from Apple and Amazon took things a step further. iPhone 4S changes the game with voice recognition technology that you simply cannot get on any other smart phone. With Kindle Fire, Amazon brings to the table a tablet that will not only help nurture its multiple streams of revenue, but provide a viable alternative to iPad. And, of course, Pandora pioneered the web radio space that companies like Clear Channel now look to mimic.
2.0, as it stands, from Sirius XM pioneers nothing. It advances nothing. It changes nothing. While it might make the experience of a handful of current subscribers slightly better, it will do nothing to drive subscriber growth, propel revenue growth or foster creation of more than one meaningful source of revenue.
I had hoped 2.0 would be a game changer. Based on the nearly comical release of Sirius XM Lynx, it's not even part of the conversation that companies like Apple, Pandora and Clear Channel dominate.
Let the dust settle after Sirius XM's next earnings call and then prepare to short the stock back below $1.50 toward $1.00.Disclosure: I am long P.