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Sirius (NASDAQ:SIRI) has decided to try and battle Pandora (NYSE:P) on Pandora's home turf - smartphones and tablets. Sirius has launched a new Sirius XM Radio App for smartphones and tablets that uses the popular Google (NASDAQ:GOOG) Android operating system.

The free app allows users to listen up to five hours of Sirius programming with no charge. It also gives users a lot more control over how they listen. Best of all, it could allow Sirius to reach vast numbers of new listeners without having to sell them any equipment or expensive long -term contracts. It also requires no deals with automakers.

If the app works as promised, users will be able to pause programs at any time and start them again at any time. They can also replay songs or programs with a single click. Users should also be able to set the App to record programs that they want up to seven days in advance. That would enable somebody to set the device to record a NASCAR race, for example, so they could listen to it at any time.

SIRIUS Teams With Google, Sort Of

The app is available from Google Play (formerly the Google App Marketplace) and from Sirius's website. Android Smartphone users can also sign up for a free seven day trial of Sirius Satellite Radio service at Sirius's website. Going after Android users makes sense, because 50.1% of smartphones in the U.S. now run on Android.

The reason why Android is so popular is obvious. It is a free, open-source operating system. Any smartphone or tablet maker can use it without paying Google a cent. By going on Android, Sirius automatically gets its product placed on tens of millions of new smartphones and tablets. Dozens of new Android smartphones and tablets could be coming out this year, including the low-priced Google Nexus.

This seems like a pretty smart move for Sirius. It could conceivably give the service millions of new listeners without having to sell them equipment. That could increase its audience base and potential advertising revenue without increasing its expenses.

Poll: Pandora Could Be No. 1 Radio Station In A Major U.S. Market

A similar strategy has worked very well for Pandora, which streams music over internet music stations. The Los Angeles Times reported that a survey of 54,000 adults called the Media Audit found that Pandora is now the most popular radio station in L.A. The Media Audit from polling the International Demographics polling firm estimated that Pandora has 1.9 million listeners in the City of Angels, while the most popular over-the-air radio station, Clear Channel's KIIS FM, had only 1.4 million listeners.

If true, this means that Pandora has 500,000 more listeners in L.A. than the most popular traditional radio station. It should be noted here that this poll was simply a random sampling of 54,000 people by telephone. There is no way to know how accurate it really it is.

Even if the polling is off, these results could spell very bad news for traditional radio operators like Clear Channel Holdings (NYSE:CCO), Cumulus Media (NASDAQ:CMLS), and CBS (NYSE:CBS). It could be that people are no longer tuning into the radio to get their favorite shows and tunes. Instead, they are turning to the smart phone or the computer.

These figures will certainly help Pandora in its efforts to sell advertising on its network. Even though Pandora has tens of millions of listeners, it has yet to actually make money. The company is now trying to tap local advertising as a revenue stream. They could also be very good news for Sirius as it moves into the online arena.

Sirius's Secret Weapon For Online Domination: Sports, Sports and More Sports!

Sirius has a few weapons it can deploy in the internet radio wars that Pandora cannot. These weapons are sports and talk radio. Sports programming is definitely the big gun that could give Sirius the edge.

Sirius has signed deals to play almost every sport in the universe. This includes Major League Baseball, NBA basketball, NASCAR, PGA Tour golf, NHL hockey, English Premier League soccer (the most popular professional sports league in the world), NFL football, college basketball, and Formula 1 racing, to name a few. It also offers some more obscure sports, such as Harness Racing (a kind of horse racing).

In other words, Sirius has some extremely different programming that Pandora cannot offer. It goes without saying that this programming comes with strong appeal to advertisers and legions of loyal fans. The people willing to shell out several hundred or several thousand dollars for season tickets would probably be willing to pay for a Sirius subscription to hear the game.

Big Time Talk Radio Talent Could Move Online

Talk radio may not be as big as sports, but it certainly packs a punch. Sirius has one of the biggest names in talk, Howard Stern, on an exclusive deal. It also offers news, political content, and stand up comedy among other talking content. All it lacks is a big name political talker such as Rush Limbaugh.

If poll numbers like the ones from L.A. keep appearing, it could have an interesting effect on Limbaugh, whose $400 million contract with Clear Channel is up in 2016. If it looks like the listeners are moving to online radio, Rush could follow them to Pandora or Sirius. One incentive that an online service could offer Rush is exclusive advertising deals to push products he endorses.

Even though Sirius CEO Mel Karazin seems to be serious about courting Rush, Pandora may have more incentive to go after him. After all, it needs to sell advertising, and to do that, it will have to offer something besides music. With Sirius having sports sewn up, talk shows seems the logical progression, and Limbaugh is the biggest name in that field.

These poll numbers could also convince other big name radio talents, such as Ryan Seacrest and liberal ranter David Sirota, to jump ship to online radio. Someone like Sirota might have more to gain from a move to a new medium, especially one that appeals to a younger audience.

Somebody else who could be preparing to jump ship is Howard Stern. Stern's name does not appear in a list of Sirius programming in a press release promoting the new Sirius XM Radio App. That could mean that Sirius is planning a future without him, or that it no longer thinks it needs Howard, whose $80 million a year deal with them is up in 2015. If Howard left Sirius, the logical place for him to go would be Pandora.

There is no indication that Stern is planning to leave Sirius, which is he is suing for a reported $300 million over a broken contract. Yet it is something to think about, and an indication of how rapidly the radio landscape is changing.

Something else that does not appear in the name Sirius XM Radio app should also give us something to think about. The words "satellite radio" does not appear there either. That could mean that Sirius now thinks of itself as an electronic content provider, rather than a satellite radio company. The company's future could be in the internet and WiFi, rather than over the satellite.

The entire radio industry is changing radically, making for a very volatile situation for investors. This situation was certainly reflected in stocks on Monday, April 30. Pandora shares were actually selling for a higher price than either Cumulus or Clear Channel. For the record, at 2:34 pm Eastern Time, a Pandora cost $8.68 a share, while Clear Channel traded at $7.55 a share and Cumulus cost just $3.59. Sirius was trading at $2.26 a share. Interestingly enough, the highest radio stock was CBS, which traded for $33.45 a share. It should be noted that CBS is partially shielded from radio's volatility by its TV work and other holdings.

It looks like we're dealing with a whole new radio business, folks. Other than increased stock volatility, it's hard to see what this means for investors and listeners.

Source: Sirius: Online Focus May Pay Off Big For Investors