I Love Sirius XM, But This Time Clear Channel Gets It

| About: Sirius XM (SIRI)

Everyone knows how I feel about Sirius XM (NASDAQ:SIRI), the company and the stock. But upon learning that Clear Channel (CCMO.PK) has dropped the word "radio" from its name, I give credit where credit is due. The company gets it, and I can only speculate that Sirius has been made aware of this information.

One month ago, I told you "It's Not Radio, It's Sirius XM." I was highly criticized for having established that point of view, but today, I feel a sense of validation by Clear Channel's announcement, albeit indirectly. In its statement, it has essentially followed the premise in my original piece - during which the following points were made:

First, I asked what's in a name?

What can Sirius do about changing that perception, particularly as it is now only a few weeks away from raising its prices? It needs to first re-brand itself and drop the words "satellite" and "radio" from its name - two antiquated ideas that are (frankly) no longer sexy. We have seen this rebranding from the likes of Apple (NASDAQ:AAPL) when it not only redesigned its logo but it also dropped the word "computer" from its name - the reason is that it realized its services and products portfolio spans more than just computers. Other companies that have gone through a metamorphosis (of sorts) include IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT) and Starbucks (NASDAQ:SBUX).

Sirius XM Audio Entertainment - Has A Nice Ring To It

I think that name is exactly what Sirius should consider itself heading into 2012. Where people may feel stupid for paying for radio, consumers will not mind paying for "audio entertainment." It has to do with the value proposition. Listening to content on Lynx, or on your smart phone, or through the Internet - these can be considered (just) listening to the radio. It's more akin to on-demand - speaking of which, HBO realized this several years ago when it came up with its "it's not TV" slogan. It presented significantly more value, especially now with its popular HBOGo streaming service that is giving Netflix (NASDAQ:NFLX) a run for its money.

In Sirius' recent marketing material, subscribers were reminded of the upcoming radio-transcending features of its upcoming Lynx receiver. The material notes the following:

  • Sirius XM announces Satellite Radio 2.0. Listeners can now enjoy 25 additional channels, better sound quality, have added functionality like "on demand" content and time shifting capabilities, as well as being able to purchase songs that you love. Many of these great capabilities are best utilized on new retail radios or by using our Sirius XM Internet Radio service which offers over 20 additional channels above and beyond the 25 we are adding on the satellite service.
  • Thank you for your dedicated listenership, and we look forward to delivering you the Best Radio on Radio.

The second bullet is enough to tell investors what it is and likely what it will be - "the best radio on radio." This was the main source of many frustrations. But several readers felt I was being too hard on the company. Clear Channel obviously understood this point and I hope someday so will Sirius.

Disclosure: I am long SIRI, AAPL, MSFT.