Sirius XM offers cheap re-subs and continues to climb

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Issue Date: 
Oct 14 2013 - 11:25am

From Issue:

It's a rising tide. While Pandora, iTunes Radio, and other IP-delivered music services build momentum, Sirius XM continues to disrupt AM/FM’s automotive presence, with enviable subscriber numbers. As Tom Taylor notes in his NOW newsletter this morning, “Sirius XM recently passed the 25-million subscriber mark, and its stock hasn’t traded this high since early 2006.”

Distribution is the key driver. Satellite radio was developed specifically for the car, where Sirius XM now enjoys a widespread installed base -- nearly seven out of 10 new cars have Sirius XM on board, according to Seeking Alpha. The company also furnishes an online component, in a reversal of the distribution order of Internet pureplays like Pandora, which started online and pushed its way into cars secondarily. (Sirius XM also offers stand-alone receivers.) Many new-car buyers discover SiriusXM’s diverse and star-studded programming with free introductory trials that last for months. An impressive 45 percent of those buyers convert to paying subscribers. (Pureplays take note: it can take MONTHS to habituate new users to a listening service … not days.)

To capture subs that have fallen off the grid, Taylor notes that Sirius XM is offering a six-month re-subscription for $25, total. Normal subscriptions cost between fourteen and eighteen bucks a month. 

That’s smart business, but the smartest part of satellite’s success has been hitching its fate to the car. Internet pureplays are not oblivious, and they are all scrambling for position in the connected dashboard. When they get there, they find competition from two staunch legacy forces: broadcast and satellite.

Comments

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