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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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  • Satellite Radio 2.0 Revealed Through Patent Apps 0 comments
    Aug 10, 2010 11:16 AM | about stocks: SIRI, LMCA

    Analysts and investors alike were taken by surprise last week, as Sirius XM announced its excitement over the future of Satellite Radio. Taking a page from Apple, Sirius XM created a buzz when it dubbed the future of Satellite Radio as "Satellite Radio 2.0."

    Few people follow Sirius XM Radio and the story of Satellite Radio as closely as I do. Over the course of the last few years, there were many patents applied for and approved with regard to Satellite Radio & Sirius XM. The overall uncertainty of the economy, the auto sales environment, trouble from the credit markets and the formerly uncertain financial condition of Sirius XM itself put many of these innovations on hold.

    I broke one such story thanks to my friends at Rapidpat.com. I recall being very excited about a new chip design that allows for a tiered service, in which existing channels could be offered with embedded advertising to non subscribers or canceled subscriptions. Looking back to early 2009, this same potential was repeated by Liberty Media CEO Greg Maffei who suggested that a limited channel lineup could be offered on an advertising based model, as a means to promote the subscription side of the business. One of the keys to Sirius XM's recent success has been its ability to market its offerings through its own base of subscribers. Increased monetization of its its subscribers through smart phone apps and royalty pass-throughs are just two examples. {{{membership}}}

    Sirius XM is very committed to continue to innovate. Satellite radio was a great example of that innovation and satellite radio 2.0 where we believe take it to a new level. While we have been reducing costs and making the organization more efficient. We continue to invest in R&D.

    Our next generation of satellite radios are expected to offer significantly more choices for the consumer and contain functionality that does not exist today in our radios. There will not be any significant increase in our costs, to bring these radios to consumers and we expect to have the first satellite radio 2.0 products in retail stores by the holiday season in the fourth quarter of 2011. - Mel Karmazin

    Moreover, the opportunity for pay per view types of services such as live concerts, Howard Stern specials or sporting events such as mixed martial arts have also been suggested, and there has also been a patent applied for and approved that would allow for this type of functionality.

    Looking to the business models of Satellite TV and Cable TV providers, it becomes clear that the future of Satellite Radio will be guided by the success of pay per access choices of premium and on demand content. With Liberty Capital's guidance, Sirius XM is sure to succeed in this area.

    In the U.S., music fans have waited for years for a chance to see Guns & Roses for example. If I recall correctly, the band has planned just one U.S. concert date this year in the United States. Earlier this year, Liberty Capital took a sizable stake in Live Nation. Imagine if you will, a scenario in which Sirius XM subscribers could simply push a buy now button on their receiver and receive instant access to concerts. Such concert offerings could come from anywhere in the world, but give subscribers the ability to listen right in their own homes and cars.

    It's 2.0, and its coming ...



    Disclosure: Long SIRI
    Stocks: SIRI, LMCA
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