iPhone

The Sirius XM iPhone application has been released. Early success brought the app towards the top for the iTunes downloaded ranking, and since, the app has dipped to the #26 position. The initial wave of downloads has already happened, and now we should be able to gauge just how popular the app is going forward. That being said, what is next for the app?

Let’s start with the obvious. If the app were to include Howard Stern, there would be an instant rush to download it once again. Like him or not, Stern is a draw for subscribers. Whether Stern will be on the app any time soon is yet to be seen, but one would think that some resolution will arrive soon.

The not so obvious has nothing to do with content. How do you increase the value of the iTunes app for consumers? One interesting answer could come out as early as this Fall with some new hardware. Rather than the launch of several new radios, the big news could well be the launch of some accessories that help to integrate the iPhone and iPod Touch with satellite radio.

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Whether Sirius XM investors like it or not, iTunes has become a sort of measuring stick of what is hot and what is not. If you can make it on iTunes, you have your hands onto something. For years, Sirius and XM fans have seen a partnership with Apple as the holy grail of determining the success of the company. A partnership never came to fruition, but Sirius XM did finally release an app that is available through iTunes.

Early success of the Sirius XM app vaulted it to the number one music download on iTunes. Within a couple of weeks, the app surpassed 1 million downloads. Now, a week later and much to the chagrin of investors, the Sirius XM app has fallen below Pandora. At this point Pandora enjoys the #12 position and Sirius XM sits at #15.

What this proves is that the competition on Internet radio will be strong. It also proves that Sirius XM, even with strong brand recognition, needs to do as much as they can to remain on top. To do that they need to find a way to compete with the high points that attract people to services such as Pandora. Pandora sports customized channels, something that Sirius XM should consider. Pandora is virtually free because of advertised support. This is something that Sirius XM can not compete with. Thus, Sirius XM needs to focus on exclusive content as they work towards improving the Internet service to offer more capabilities that are appealing in services like Pandora.

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The Sirius XM Radio app has been on iTunes for a couple of weeks now, and recently passed the 1 million download mark. This makes the satellite radio app one of the most popular downloads overall, and the number one music service download.

The success of the long awaited app is good news for consumers, and a mixed bag for investors. Simply stated, there is no detail available as to who exactly is downloading the app, and what the mix of existing vs. new listeners is. We simply do not have the kind of detail needed to asses the value of 1 million downloads, and with various scenarios at play, the milestone could mean anything from good news financially, to a break even proposition.

- Existing subscribers that download the app add nothing to the subscriber rolls, but may add to the bottom line. If they were not previously paying for the $3 Internet feed, the company gets a bit more revenue out of that subscriber. If they were already an Internet subscriber, then the financial benefit to the company is nothing.

- New listeners that download the app are not counted as subs, and as yet, the company has not supplied a conversion rate. If a new listener subscribes, the company is looking at a minimum of $12.95 per month and a new subscriber. If the promotional subscriber does not subscribe, it does not impact churn. A successful Internet conversion rate is typically no more than 5%. As you can see, even with 1 million downloads, it will be a challenge to garner new subscribers.

One hurdle faced by Sirius XM Radio is the short length of the promotional trial. Listeners only get one week to test drive the service, and functionally, that is not a lot of time. With services such as Pandora and Slacker offering free music, it is not hard to imagine someone trying Sirius XM for a week, but reverting back to the free service apps offered on iTunes. Sirius XM has distinct advantages and disadvantages when compared to the free services out there. In my opinion, a week does not give the consumer enough time to really learn the advantages offered by Sirius XM.

The pace of downloads is impressive, but 1 million downloads with no data to break down is virtually worthless to investors. The company needs to provide some clarity in those numbers, improve the app, and branch out with apps for Blackberry, the Palm Pre, etc. Time will tell.

Position – Long Sirius XM, No Position Apple

The Sirius XM app is out, and is a very popular download. It ranks among the most frequently downloaded apps not only in the music category, but overall. The app was an instant success despite the absence of Howard Stern, but the popularity has slipped in recent days, falling behind apps such as Paper Toss and a pinball game titled Wild West.

So how can Sirius XM make the app more of a success? In my opinion, they should make it more interactive. This weekend I found myself listening to Boneyard (Sirius 19 and XM 53). Boneyard is doing a countdown of Rush songs. The countdown was formulated by fan emails regarding the popularity Rush songs. I learned of this by cross promotion on Classic Rewind, and found myself tuning into Boneyard to catch songs from what is one of my favorite bands. This got me thinking.

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Last week Sirius XM finally launched an app for the iPhone and iPod Touch. The app made big news in a couple of ways. First, the fact that Howard Stern was not available on the app was the major attention getter. The other newsworthy item is that despite Stern’s absence, the app has enjoyed a huge number of downloads, and quickly became one of the most popular apps to hit the market.

With all of the excitement, news, and reviews, there is still one question on the minds of many. Why isn’t Howard Stern available. Speculation ran wild, and calls to Sirius XM were met with an overall silence with regard to the issue. Some felt that Sirius XM was holding back, others felt that there was a potential worry about bandwidth on AT&T’s network, and still others thought the issue may revolve around Stern wanting more money.

While any official confirmation has not been made, there are several indicators that would point to the fact that Stern is a central part in this issue.

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I recently put my hands onto an iPod Touch in preparation for the Sirius XM launch of their iPhone and iPod Touch application. I wanted to get the device early on so that I could tinker with it a bit prior to the application coming out. Having never owned an iPod, I must say I was instantly impressed with the functionality, ease of use, and capabilities that the device offers. I spent a good couple of hours tooling around, downloading applications, and even rented a movie. The ability to buy applications, movies, television shows, and music instantly is a wondrous business model, and once you get a device such as this, there is almost no looking back. I will find it most difficult to part ways with the iPod Touch.

The iPod touch is identical to the iPhone, with the exception of the telephone aspect. As a Blackberry fan and user, I could easily see myself swayed to the iPhone side of the aisle after using the iPod Touch for only a couple of hours. Coming from a guy who is into gadgets, and has his Blackberry tethered to his hip, that is high praise.

Typically for satellite radio, June has always meant that a new and trendy satellite radio would be unleashed on the retail channel. This year that trendy new satellite radio is not a piece of hardware, but rather a software application that links up to what can only be described as the most innovative hardware out there.

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The iPhone and iPod Touch application has finally made it to the market, but on a day where satellite radio fans and consumers should be celebrating, we instead see ire and confusion. Sirius XM’s app seems cool, but it is missing one of the biggest draws that satellite radio has. The App does not include Howard Stern, and in my opinion, this mistake is huge. How can the “King of All Media” be on the sidelines here?

People are wondering why the absence of Stern. Some seem to think that there is a contractual issue, some think that the company may not have the rights to include Stern, some think Stern wanted more money, and others believe that the company is doing what it can to get additional dollars out of consumers.

In my opinion, there is nothing that should have held back the inclusion of Howard Stern. Stern’s show is already available on the Internet feed, and in point of fact, the iPohone and certainly the iPod Touch are basically mini computers. As a consumer, I can buy an AT&T air card, plug it into my computer and stream my Sirius XM Internet subscription that includes Howard Stern. Why shouldn’t I be able to do that on an iPhone or iPod Touch?

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You have waited patiently for 11 long months, been forced to read countless articles about it’s release, and even watched a home grown Sirius XM app that was ready to go 5 months ago get squashed like a bug but, all of that is over now… the official Sirius XM iPhone is actually available today, for the first time, via the iPhone App Store.

At first glance there is a lot we can learn from the new SiriusXM.com iPhone information page, most importantly that they are offering a free 7 day trial for all new listeners and that the application itself is FREE, something we all knew would be important from the get go. That being said, there are quite a few things that I don’t think a lot of people we necessarily expecting.

The first thing that should jump out at readers is that the new iPhone application is only available in the United States. One would have to assume that this is because of royalty fees and regulations at this point, similar to those that have plagued the international availability of other Internet Radio companies but, it will no doubt be disappointing to those people outside of the country who have been so eagerly awaiting the release.

The most shocking thing about the new iPhone may not be the 120 available channels but instead, the channels which are NOT available. The list astonishingly includes MLB® Play-by-Play, NFL Play-by-Play, SIRIUS NASCAR® Radio, and Howard Stern! How could the person who Sirius XM cites as being responsible for bringing in more subscriptions then anyone else not be part of this application? As we sit and wait for more news this is certainly something that will have both investors and subscribers alike scratching their heads disbelief.

Update: The reviews are already flowing into the iPhone app page dedicated to Sirius XM on iTunes and it has not gone without notice that Howard Stern is not available. People are, shall we say, less then pleased. A quick search of twitter for the terms “Sirius Howard iPhone” should give you an idea of the tone being used in the emails which are already flooding into my inbox.

For more information readers can visit siriusxm.com which has apparently, for the time being, been transformed into a stand alone promotional website for the iPhone application