$0.63
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Sirius XM Radio (SIRI)
CAPS Rating:
A satellite radio provider in the United States which currently broadcast a number of channels of programming to listeners across the country.
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*I originally wrote the below as a pitch for my first red-thumb of SIRI way back in May 2006.*
This battle is about *content*, period.
Who one the war VCR war, VHS or Beta? Who had the superior technology?
Who one the operating system war, Microsoft or Apple? Who had the superior technology?
Content, content, content - I'll grant you that Howard Stern is a unique commidity, but it's not enough. As for the rest of traditional radio fare, music is music, sports is sports, news is news. Where is the *content* advantage that can't be duplicated and can't be done with pretty much the same effectiveness as syndication?
This Fool just doesn't see it.
A disruptive technology? If these guys don't win the *content* battle, satellite radio will join Betamax and the long list of other failed technologies. Without superior and differentiated content, the only disruption this technology will bring is to its shareholders' portfolios.
One major problem with your thesis is that music is NOT just music. Terrestrial music radio is absolutely horrific and has been so for a very long time. Sure, we can listen to stuff we already own, but a big part of the fun of driving is the possibility that you might hear something really great that you've never heard before. Right now, for that service, satellite is the only game in town. In terms of music, Sirius is superior and well-differentiated from corporate terrestrial radio. There is a lot of cool music on the web and I think it will inevitably be the dominant music distribution channel of the future, but it's going to be quite a while before a large percentage of cars have internet capability. Long enough for Sirius to figure out a viable web strategy, if they can make some good decisions.
Only one problem with this line of thought (though it's a biggie)...With regard to music, you are talking about appealing to niche markets. In order to justify the enormous up-front costs of launching sattelites, SIRI needs *lots* of subscribers - something that niche markets, no matter how many of them you try to string together, just can't provide.Those who do have the ability to bring lots of ears (e.g. Stern) are also in a position to extract most of the profit for themselves.The question is, who has control over the most critical element to SIRI's success? The answer is that it isn't SIRI.
Individual genres of music are niche markets, but when you string together a large number of small niche markets, the aggregate can get up to a fairly respectable size. However, I didn't mean to suggest that music is anything more than one component of Sirius' strategy. Obviously, talk radio and sports are also critical. If Stern left it would be a major loss and it's possible the company might not survive, but I don't think that's a certainty. What they really need to do in the talk realm is search out unique new talent that doesn't come with a massive price tag. To put it in baseball terms, it probably wouldn't make sense for the Milwaukee Brewers to try to pay Alex Rodriguez to play for them...
As far as stringing together niche markets to put one together of respectable size, how long has SIRI (and XM before it) been trying to do this? I think the results speak for themselves.As far as finding a unique talent that doesn't come with a massive pricetag, I'm not so sure one exists -- at least not one without an already built-in listener base. SIRI could try cultivating one on its own, but there are a couple of problems there too. First, it would take time -- time that SIRI simply may not have. Second, and more importantly, what do you think will happen once said popular personality goes to renegotiate his/her contract and has some very real options (like syndication)? Precisely the same thing that's about to happen with Stern.Fundamentally, this is a flawed business model because those who have the power to bring to SIRI what SIRI most needs (listeners), are in a position to extract much of the profit for themselves.
Who "one" are you kidding me, you shouldn't even post a thread (literally) if you don't know the difference between "won" and "one". By the way VHS was dead along time ago, just like the standard DVD is dying, and Blue Ray will be replaced also........and Apple is not dead by any stretch of the imagination. You obviously don't own a satellite radio to understand the difference between "Great Music Selection" (nation wide I might add) with no commercial interuption and the crap that is played in the local markets. Have you ever even driven a car out of town.....the thought of having to try and find a radio station every 50 miles is draining!! I bought 10,000 shares at $.11, and I will hold on to them until the bitter end!
I do know the difference between won and one... though apparently on that day back in May of 2006 I wasn't paying much attention.No, I don't own a satellite radio. But let me ask you this... SIRI has been trying to put together a nationwide "Great Music Selection" for how long now? And how well has it worked for them? You can check the CAPS record, but I first panned SIRI back in May of '06 at a price of $4.17/stub - and it's lost about 90% of its market cap since. The remaining 10% is, in my view, simply a matter of time.I wish you well on your SIRI investment, I really do. I honestly think you could find much better places for your money, however.
My only reference in regard to SIRI is my own experience. I never thought that I would pay for radio, after all, it's free! When I bought a new Tahoe in 2004, they included a free trial of Sirius. I didn't listen to it much at first, but then it grew on me. I have really enjoyed the wide array of music choices and the programs to which I would not, otherwise, have access. I no longer listen to terrestial radio and have become addicted to satellite, even though I never thought this was possible. Perhaps this is a generational phenom as people in the baby boomer generation grew up listening to the radio.I don't know if they will make it as a company, that will depend on their management, vision and creativity. But I think they have a valid product. I never gave PriceLine a hope (who would let you name your own price?) or Starbucks (who would pay $5 for a cup of coffee?). So, who would pay for radio?I'm not sure about SIRI, but satelitte radio is here to stay. It will keep getting better and better.
wish i would of bought agin @ 6cents....
Article killed by spelling errors. May it rest in peace.
The post was killed by horrid orthography.
The disruptive technology is the upcoming iPhone OS and the imminent arrival of the Sirius app, which will turn every iPhone into a (potential) SiriusXM receiver. Will it matter? Will iPhoners be willing to pay enough to make it matter? We'll find out.
VHS or Beta? jajaja, you can't even compare those. SIRI only competes with radio, period ! And as soon as technology allows to play satellite radio in other devices or places! such as, airplanes? Smart phones? and the balance sheets start to show positive numbers, fasten your seatbelts because....."Houston we are ready for take off"
Hello, the iPhone already has "Pandora" and it's free and without commercials.
I accept the premise that it's all about content, but the conclusion I've reached is completely the opposite. Unless you're into pop, rap, or talk Sirius/XM is far and away the best source for content.
If you happen to enjoy classical, jazz, blues, rock, Motown, reggae, etc. the content at Sirius/XM is well worth the subscription fee, and you get the added benefit of consistent, high quality reception anywhere outside of any tunnel you might encounter. Other non-music channels are also available that you can't find anywhere on terrestial radio -- comedy, business, and sports to name a few. I happen to enjoy hockey and wasn't pleasantly surprised to find that Sirius/XM had a hockey specific channel covering the Stanley Cup to a degree I've never heard before.
Russell, I agree with you wholeheartedly, it's all about content. Now if people start buying cars again, perhaps it can be about making money too.
Who one ?
Please learn to write before trying to analyze stocks.... you id$%i#%ot...
ONFG !!! Where are you from ???
Yes, it is about content and Siri will continue to lock up content providers, entertainers, artists etc with well produced and unqiue programming that people want. It is a great service and the people who have it worship it. So Iphone, Android, PC or any other access points will have to go sub this content for their platforms from who else, Siri. Do I hear licensing agreements. Siri long.
Wouldn't put my money in because if they didn't make any in the boom. How are they going to survive the biggest bust in 30 years? Would red thumb it if I could.
The no ad/static content help make it much better to me but it probably depends a lot on what you like to listen to & if they have that where you live.
Siri may lock up content, but that misses the point.
The point is, at what cost?
The content producers have more viable alternatives than SIRI does, which gives them the 'whip hand' during contract negotiations. Which in turn puts them in a position to extract SIRI's profits and keep them for themselves.
And the I-phone app? I'm sorry, but... yawn.
A new distribution channel for a failed product doesn't change the nature of the failed product.
Has anyone produced a decent valuation of SIRI recently? I've only found one so far, which did a rough comparison with cable subscribers and how they are valued. It was VERY rough, but came out around $.65/share I think. SIRI is talked about with great passion by both its fans and haters, but I need to see more concrete numbers.
"Siri may lock up content, but that misses the point."
Your original post was all about content. He didn't miss the point at all.
Content yes, that's important. I think Sirius is a winner because of other factors. How many of you pay for cable? TV was free (still kinda is) for a long long time, along came HBO now you could watch movies with no commercials in your own home. Anyone remember hearing thier parents say "I'm never paying for TV."? The ability to tune into your fav music, talk, sports, unedited, commercial free, across the country, across Canada, is powerful media. I pay for this (coming from a guy who gets up an hour early to brew his own espresso, I DO NOT PAY 5$ for coffe) and I am a firm believer others will as well.
I don't pay for radio. I'd rather watch DVD's on my in-dash dvd player.
Sounds safe.
SIRI sucks. Dead in a year.
"I don't pay for radio. I'd rather watch DVD's on my in-dash dvd player."
LOL...right next to the aquarium and magazine rack. Just stay to the right so we can avoid you.
Back on topic - 1st it was "This battle is about *content*, period" by the OP and with that point debated against by others now it's "Siri may lock up content, but that misses the point."
So much for "period". I'll declare this thread bipolar and dead if no one else will. Take a mulligan & try again.
How may XM weather radar play into this. It is currently offered on most new navigation equipment. I subscribe for my boat, plane and car radio. That's three subscriptions.
Most active cruisers or aviators I know use the service. I wonder will they start offering
weather radar info on automotive gps sets.
Back on topic - 1st it was "This battle is about *content*, period" by the OP and with that point debated against by others now it's "Siri may lock up content, but that misses the point."
So much for "period". I'll declare this thread bipolar and dead if no one else will. Take a mulligan & try again.
The two points aren't in conflict with one another (though I can see how it may look that way on the surface).
To clarify: The battle is about content, period. More specifically, it's about who controls the content (and it ain't SIRI). The point is this: SIRI doesn't create content -- it has to 'buy' it. The producers of content have more viable alternatives than SIRI does -- and are therefore in a position to extract much of the profit and keep it for themselves.
SIRI has two choices -- pay for premium content that will attract a lot of ears (and pay through the wazoo for it, leaving them rather unprofitable given the huge fixed asset base), or not pay for premium content (and not get the number of subscribers necessary to justify the investment in the huge fixed asset base).
This battle is indeed about content, and who controls it (and who doesn't).
Look, in your original post you hit the nail on the head. It is about content. SIRI/XM has the content. Almost everyone I know has sat. radio, not because of the music, its about the sports, and talk, comedy etc.. MLB, NFL, NBA, Soccer, Nascar, etc..Not to mention NPR, CNN, CNBC, Bloomberg, etc.. You can not get all this content on terrestrial local radio. No choice, cheesy DJ's, local crap. I got sat radio because I was sick of being forced to listen to local college softball instead of what I wanted. I went camping a few weeks ago in the middle of no where, 1 local country station I could barely get. Turn on Sat radio and I am tuned in.
There is something about investing in Sirius/xm stock that sends many of the investors into a frenzied animalistic rage when confronted with the slightest mention that Serious/xm stock is not exactly Berkshire Hathaway quality let alone anything but a historically terrible investment for the vast majority of those who have seen thier wealth vanish after buying this stock. Look at the facts and track the price of these shares from the year 2000 to see one of the worst downward death spirals in the annals of stock loss history take place right before your eyes. Figures can't lie but liars can figure which is the only way you could try to paint this stock as having a super positive outlook and being a sound stock for the protection of capital as well. These are just facts that I am stating here and the response from shareholders of serious is like that of no other companies shareholders I have ever known of. They come crashing out of the woods raging like like giant silverback apes, oohhh aahhh eehhhhh ahhh ee eehhe, as they pound thier chests and begin hurling thier feces at the focus of thier psychotic rage. This is not the work of just one or two angry old alpha baboons and apes who are always hostile in this manner. This is an entire herd of primate's who seem to hear any negative mention of Serious/XM throughout the investment jungle as a call from Tarzan. Suddenly a herd of babbling monkey's of every shape and size seems to charge in from all directions and without exception they are armed with fistfuls of thier own offal or busily grabbing for a steaming ball of poop to hurl at the person so evil, so awful and diabolical that the vile creature dared to point out that Serious/xm has been a lousy stock, has done a lousy job of operating as companies generally do in comparison and that it is a time, who just never needed this idea at all and superior companies offering a better product will soon be driving a stake into this bloodsucking capital vampire's heart in many people's opinion including my own. I am not rooting for this to take place, nor do I want to see this company go out of business. I would take no pleasure in witnessing the losses of one of Sirius/Xm's investors and if it was up to me you'd all make 1000% ROI's. If wishes were horses beggars would ride so the reality is that I have no ability to affect the financial future of this company no matter what I do or how hard I might try it would all be for naught. So my suggestion to all of the apes named Ape out thier who own shares in this company is that you spend less time focusing on throwing your feces at those who cannot effect your investment and more time focusing on the feces you have invested in by buying this stock. Rather than hurling shares of serious/xm at me picking up where you left off you might try to sell them to someone else before the fundamentals kick in and see to it that Sirius/XM is a terd that finally gets flushed.
Beta actually had a far superior technology to VHS (in the beginning VHS tapes could only hold an hour of content), but for non-technological reasons, the VHS format won out (with a big boost from the adult film industry which embraced the format).
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"To clarify: The battle is about content, period. More specifically, it's about who controls the content (and it ain't SIRI). The point is this: SIRI doesn't create content -- it has to 'buy' it. The producers of content have more viable alternatives than SIRI does -- and are therefore in a position to extract much of the profit and keep it for themselves"
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It depends on what you mean by "content"- Do you mean music? Because the majority of "free" FM/AM radio channels are tightly controlled by restrictive corporations such as Clear Channel that slam the door on most artists outside of the mainstream, whereas SIRI allow entire channels devoted to non-top 20 forms of music like Jazz, Blues, Bluegrass, Electronica, and Independent Rap/Rock/Metal/Folk/Punk. For many of those bands terrestrial radio isn't an option unless you think NPR and poorly funded college radio stations offer a platform of competition against FM/AM.
Does content mean media personalities and their brands? Because SIRI allows personalities and companies to grow their brands by providing a 24 hour platform to Chris Russo, Howard Stern, Oprah, and Martha Stewart to provide their own programming and build their name.
So I disagree with the premise that the producers of SIRI's content have more viable alternatives to the extent that they can put the squeeze on SIRI. The biggest names on SIRI, like Stern or Oprah would surely be successful elsewhere, but the SIRI platform allows them more leeway than those other alternatives. Obviously Stern can swear and do whatever he wants, but he can also give channels and time to his cronies and showcase talent that he's sponsoring. Like Stern, Oprah has an entire channel (not that I listen to it) that's dedicated to further growing her brand and showcasing people her flunkies like Dr. Phil.
As far as music goes, most artists don't have better terrestrial options than they do on SIRI. Artists like AC/DC, Metallica, Rolling Stones, Paul McCartney, and Coldplay have all had dedicated 24 hr music channels that played for a month in the run up to their new album releases- that's not something that conventional radio allows for. That also points to another aspect of strength of SIRI, and that's flexibility: if they want to create a channel for a month, a year, or a weekend (such as their live broad casts of Cochella, Lollapalooza or Bonneroo), they just go ahead and do it. There's not a ton of overhead to create the studio content portion of their shows, all of the money is up front in getting the talent to sign in the first place.
I do think that the SIRI iPhone APP probably won't make a huge splash due to competition from Pandora and things like it, but I'm not sure we're at the point where the internet is the primary way of getting radio, and we're definitely not there in cars and business (and that's to say nothing about the fact that there are a million things on the internet to distract you from listening to the radio while you're surfing the web). The other thing about Pandora is that, while that application is free, you're also spending probably $25-30 a month for the data package on your blackberry or iphone, so if you have a smart phone as your primary means of listening to music, that doesn't look like such an awesome deal compared to SIRI's subscription price.
SIRI also has "backseat tv", which while not being a huge factor now, gives them experience in a niche that is only likely to grow during the coming years as monitors start making their way into more vehicles.
I'm not saying SIRI is an awesome buy for a short or wasn't over-priced when it was $4, but I think they have a strong product in a growing niche. If the company doesn't fold, then I think this is an investment that will payoff once it stabilizes. Even with the possibility of a reverse split, it's pretty easy to limit your risk at $.65 a share.
I really like the content on SIRI - you can't get it on terrestrial radio. However, the subscription is not cheap and I can see this being a stumbling block to future sales. I don't know the demographics for the station but I hazard a guess that it is middle-aged folk. They should be more inventive in their sales and marketing - they need to need to get a young subscriber base that will stick with it. I never see special offers for new subscribers etc.
Good product bad stock kinda like Jones I love the soda but that doesnt mean its a great investment.
What else can one say after that? well stated.
Some of the other comments have pointed at terrestrial radio being really bad... I have to say, I 100% agree. Every time I drive and turn on the radio, I find myself angry and constantly searching the dial for a station without a commercial playing. Five, six commercials at a time followed by one song, and then some more commercials.. now the weather.. now some more commercials... ok ok we'll play a song, but first here's another commercial.
Radio sucks. It used to not suck as much.. But it really does suck today.
The curious thing is.. we can get broadcast television for free, just like radio right? Along came cable TV. People laughed. What a stupid idea! No one will ever pay for something they can get for free, right? Look, I have SIX stations on broadcast. I can't watch SIX stations at once! Along came dozens of channels. 24 hour sports. Movie channels... Oh, and boobs.. yea.. Well, people stopped laughing and started buying.
Now I don't know anyone that only has broadcast TV. Oh wait, I do know one person.. *Anyway*.... I'm quite sure you see my point.
I think the real trick for SIRI is penetration and having their radios be smart, like cable boxes. (Perhaps, like an iPhone hooked up to a car stero?) Put the radio in the cars, make a handful of stations (with some limited advertising) free with the obligatory, hey sign up for XYZ station with no commercials and smooth jazz all the time adverts. Users should be able to sign up for plans and stations of their choice automatically on the SIRI web site - Just the same way they can add HBO to their cable, they should be able to add Howard Stern. Give everyone free 30 day one time trials of any and all stations... Hey limit 2 per month you leeches! Is there a subscribe to this station button on the radio yet? There should be...
Anyway.. I don't know the product as I haven't yet broken down and signed up (my commute is less than 10 minutes!) Perhaps you can already do this stuff. The point of all this babble is this really does seem to be very similar to broadcast TV vs. cable - and we all know how that one turned out. The key thing is penetration, having vastly more content, and price. The one thing that concerns me is that unlike TV, most people use radio a lot less, and therefore are willing to pay less. (Yes, and eff you Comcast!!)