One of the big selling points of satellite radio when it launched was limited (XM) or no (Sirius) commercials, nation wide coverage, and the exclusive content the companies were able to offer. As the years have passed, some of the things that made satellite radio so special are not quite as special as they used to be. It is for this reason that Sirius XM needs to be very careful in considering the exclusive contracts they do have.
Content like the NFL, even though it was not exclusive, had something special and unique that Sirius could offer. Every game with both the home and away feeds, the NFL channel, and some good marketing rights. Today, the NFL has their own app on smart phones that takes away from some the uniqueness Sirius XM has enjoyed.
Over the weekend the NFL season started. I found myself engrossed in my NFL app on my Android smart phone. The app features instant scores, video clips, text messaging on anything relating to my favorite team (New England Patriots in my case), standings, schedules, injury reports, etc. You can get general information as well as team specific information. All in all, it is a great product. It does not give an audio feed, but the interaction is great, and the ability to customize is huge.
Seeing how this app functioned got me thinking. Should Sirius XM renew the NFL deal, and if so, at what cost. Certainly having the NFL gives Sirius XM some cache, but in the end is paying top dollar for it worth while? Could the NFL go on their own and begin streaming games (at least the audio) through smart phones? Will another service such as Pandora enter the bidding mix for broadcast rights?
At first blush I would think that a new deal with the NFL may come at a discount when compared to the first deal which was struck when Sirius and XM were competing. Looking deeper, there are other potential suitors, and perhaps even the NFL themselves.
Simply stated, the NFL is not as exclusive as it once was. The mobile Internet has given the NFL and virtually any company a presence in the mobile arena. They can work direct to the consumer more than ever. Howard Stern and Opie & Anthony are in negotiations right now. There is an exclusiveness to those shows that Sirius XM needs to keep. If either went to a company like Pandora it would make the Internet Radio provider that much more close to delivering the same type of content delivered by satellite.
The key going forward is owning exclusive content, and marketing it properly. Sirius XM has several deals that they are considering right now. They need to understand that the exclusiveness that got them where they were is beginning to vanish. They need to hold onto that as best they can. With new competitors in the market Sirius XM may need to pony up a bit more than they thought just to keep their edge.
Position - Long Sirius XM