Twice.com on Sirius and the internet

[SiriusBuzz]

What is their ARPU?

They do not disclose.

I have never heard free radio listeners ever described as subscribers.

It would probably be more accurate to call them "users" but some of them are paying. That total is total users which encompases both ad supported and premium users.

Personally I think Pandora is a very good service. I just question the business model. I don't believe they have found it yet. Being profitable and being a revenue growth radio business are 2 different things.

I am pretty sure what you see is what you get. This is their model, they have implemented it and taken it from losing money to making money. The only thing they "havent found yet" and I assume will continue to evolve is their ability to deliver different types of targeted ads to their ad supported users. They just got a big injection of VC funding in a bad economy so, others are seemingly on board with the model.

Like I said, I am not concerend with their ability to make billions (although that is even scarier), what I am concerend with is them even breaking even. Breaking even means that they will continue plug along and strangle this piece of the market.

[MUSCLE13]

What would you propose their course of action should be to take on Pandora in the internet space? Should they buy Pandora even though the business model is questionable?

They have obviously taken 2 steps with the iPhone - Premium online and Skydock. To me it makes a perfect amount of sense to extend this to Blackberry and Android. If the do this are there any other avenues to take besides acquisition?

[SiriusBuzz]

They should take them on. Its very little risk and technologically its easy to get into. I mean, they offer internet radio now... its just sub par. For some reason their whole org does not move quickly enough.

Sure, now they have an iPhone app... great. Where were they 12 months prior to that release when Pandora was signing up 45k new users per day. I don't know if the company is already too big to move quickly or what their problem is but they need to concentrate on getting things to market and taking advantage of things like iPhone app explosions... not getting in when there are already a million other apps out there.

Slacker and Pandora are already on every major platform (and they do it in a matter of weeks)... what is Sirius XM waiting for? This is low hanging fruit and in the grand scheme of their costs its minuscule. You can build an app for less then the costs of one persons yearly salary.

I have always had high hopes for this company and I still think they can succeed but I also think they could have (and maybe still can) increased their subscriber numbers at a much higher rate.

[MUSCLE13]

Being first or fast to market is of no concern to me. They were very late to the iPhone and they got a million downloads in a matter of days and are #5 in music apps now. They are probably between 2 or 3 million downloads at this point.

The content on these apps should be the concern. They will have no problem getting downloads as long is the content is there. Not having Howard on the app is ridiculous.

[SiriusBuzz]

You dont have to be first to market but if you are not, be prepared to be the best or spend a ton of money. Sirius XM is doing neither of those things. Blockbuster tried to move into the online dvd rental space too late to take on Netflix and it cost them dearly.

I agree that the content should be the concern but when an app gets downloaded like wildfire and it is passed on by word of mouth because it is so good, it becomes hard to compete with. It is happening with other applications in the app store today. There are developers being written about who are writing superior applications left and right yet they can not compete with the first in apps which now have a stranglehold on the top spots.

Its like a search engine ranking in google. If the #1 spot gets 10,000 hits per day the #2 spot might get 1,000 while #3 might get 100 and the #4-#10 get next to nothing. Thus the most popular websites remain the most popular websites over time regardless of their content. Google fuels so much traffic to the top spots that its Googles fault that the top spots never change.

It is such a huge issue at this point that Google is focusing on just that issue in their upcoming algorithm tweaking.

The same thing that happens on Google is the same thing that happens in the app store. Some kid wants a music app, he goes to look at the music app and the top app has millions of download, a great rating, and is free. He then downloads it and it does everything he hoped it would... he never goes back to even see that Sirius XM was sitting at #5. Its human nature.

You and I dont see it that way because we like the product but imagine being totally ignorant and looking for a music app for the iPhone and it becomes clear to see the issue Sirius XM faces.

[MUSCLE13]

Sirius will never be the #1 music app on any cellphone simply because they charge a monthly sub fee while other apps are free.

And as a shareholder there is absolutely no way I want Sirius to be #1 and free like Pandora..........

[SiriusBuzz]

Most American homes have some form of pay TV (cable, satellite) vs free TV. How did the pay version surpass free?

I am surprised that you think a pay service cant beat out a free service...isn't that what you are banking on as a fan/shareholder of SATRAD? They compete with free and have millions of subscribers... they actually grew faster then cable TV which now beats out free TV.

[MUSCLE13]

There is no single cable network that beats a top free TV network in terms of viewership. None even come close.

Free terrestrial radio has about 90-95% of the US listening. Satellite radio has less than 10% with its 18.5 million subs.

In terms of cars I would be ecstatic if Sat Radio could get 50 million subs out of the 240 million cars on the road. That is still less than 25% of the cars and would make sat radio one of the biggest success stories in the history of media next to cable TV.

Charles if you are looking to go deep into a discussion the media business you have zero shot against me. I know more than Spencer, Ryan, and Brandon combined about the radio and media business as I have followed it closely as an investor every single day for 2 decades now.

I could go on all night but my wife would get mad. LOL

[SiriusBuzz]

There is no single cable network that beats a top free TV network in terms of viewership. None even come close.

Yet more people pay for TV then those who don't in the US. Which was all that I was saying.

Charles if you are looking to go deep into a discussion the media business you have zero shot against me. I know more than Spencer, Ryan, and Brandon combined about the radio and media business as I have followed it closely as an investor every single day for 2 decades now.

That may be so but you still aren't addressing the fact that more people pay for TV in the US then those who don't. There is no "deep discussion" to be had here. Your knowledge of media has nothing to do with the issue at hand which is the fact that paid services beat out free services. It does happen.

If what you are saying is that you think a paid app can not beat out a free app, that is your opinion. I for one, disagree. That said, there are other options besides simply charging for the Sirius XM service on the iPhone app... they could easily offer a small "teaser" number of channels for free in an attempt to get people convert to paying subscribers. Then it becomes free music app vs limited free music app which should be even easier to win.

[MUSCLE13]

Charles please stop. Over 98% of the people of this country watch free Broadcast TV channels. Close to 80% pay for TV - cable or satellite.

This is not an either or business. If you look at the numbers a large majority of Sirius subs listen to free radio as well. It's not a matter of beating free radio, it's matter of getting a nice percentage of their listeners to get Sirius.

That will be done through the car as radio has always done. What does Mel always say? There will be an AM button, and FM button and a Satellite button on the car radio.

100% of cars come with free radio. Mel's target is to eventually get 65% of cars having factory installed sat radios. There will never be 100% because as Meyer said on the call a lot of the leader cars don't convert as well as the luxury cars.

I think the concern here should be is Pandora and internet radio ever going to make it into the dashboard and how successful will they be? They are trying. It's a tall task.