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Brandon Matthews (pseudonym) is the founder of SatwavesPro.com, which was borne of his desire to help retail investors after witnessing the continually changing ways that Wall Street can cheat them. Brandon has worked for Monroe Parker Investment Bankers, Morgan Stanley Dean Witter, American... More
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  • Sirius XM Marketing Deserves Some Credit 0 comments
    May 15, 2009 6:02 AM | about stocks: SIRI

    Now that Sirius XM has made the leap of faith by disclosing its true subscriber numbers by separating promotional subscribers from self paid subscribers, a little light can be shed on the company's marketing plan.

    To understand this concept, investors first need to completely abandon the idea of Sirius XM having nearly 19 million subscribers. They will get there, but they are not there yet. Sirius XM reported that they have 15,436,410 self paying subscribers. The other 3.1 million are in promotional periods which can expand and contract due to market conditions in the auto sector at any given time.

    For years, I have been guilty of joining a chorus of negative sentiment when it comes to the apparent lack of marketing from Sirius XM. The newly discovered truth that there are over 3 million Sirius XM subscribers currently in promotional periods reveals the myth of this investor sentiment.

    Non-music channels such as CNBC and others provide the company opportunities to advertise its own channel lineups, special programming and "best of" offerings to a captive audience that numbers in the millions of potential subscribers.

    These promotional subscribers offer the company an exceptional marketing opportunity in that there is no hardware requirement's above what is already in the car. This campaign can be utilized at the lowest possible cost, which is next to nothing when compared to other options such as network television.

    The importance of the soon to be released Sirius iPhone & iPod applications comes into play here also as a way of increasing the retention rate of these promotional subscribers. As the unemployment rate remains high, it is likely that Sirius XM will need to add more value to its service to attract and keep a higher acceptance rate which has fallen from 50 - 44% in recent months.

    None of this has been missed by Sirius XM and this marketing plan may very well have helped the company avoid many more promotional subscriber losses in the first quarter. Perhaps credit should be given, where credit is due.

    Position: Long SIRI

    Stocks: SIRI
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