How Sirius XM Can Make iPhone App an Instant Success
Investors and consumers of satellite radio are anxiously awaiting the Sirius XM iPhone application. Talk of a relationship with Apple has been on the minds of satellite radio fans for years. Each year as the MacWorld event approached, speculation would arise about a possible announcement of a great new partnership between Apple and either Sirius or XM, and each year, satellite radio fans would be disappointed.
Finally, Sirius XM is going to be launching an iPhone application. There is a lot of speculation about what this will mean for consumers as well as investors. With a weak OEM channel, and a sluggish economy, there is potentially a lot riding on this soon to be launched application.
Properly marketed, this application can help the bottom line in many ways. However, in this economy, even the best marketing plans are challenged when it comes to separating a consumer from their dollars. Thus, what can Sirius XM do to ensure massive exposure with this application? How can they make sure that as many people as possible get exposed to the service? Perhaps the best way is the simplest…
Give It Away For Free
I know the consumers are happy with that, but the investors may well be scratching their heads. Let’s consider the OEM model of attracting subscribers. When a consumer buys a car, they get 3 months of satellite radio free. Why not offer a free three month trial for the iPhone application?
Yes, it will push off potential revenue for a few months, and will have costs because of royalties, but free will bring many more people into the door than trying to sell a subscription, and at this point getting the most exposure is probably the most important factor. In addition, the “free” strategy does not have to go on in perpetuity. If it does not deliver results, the company can go back to the standard model.
As we are already aware, services such as Pandora, Slacker, and IheartRadio are among the most popular application downloads. Just the simple fact that these downloads are popular gives these companies added exposure on the web, and generates more downloads. With my Blackberry, I always refer to the “popular” applications, and oft download them. Users of the iPhone are no different. By offering three free months, Sirius XM will get their share of that “popular” page.
Services such as Slacker and Pandora are competing for the same listeners and fans. If Sirius XM is able to demonstrate that they offer something that those services can’t, in the form of live content, news, sports, and talk, they will be able to demonstrate to the consumer why there is value in getting a subscription.
Part of the business model for Internet radio services is the “up-sale”. They get you using the free portion of the service and liking it. You then get “up-sold” to getting a subscription for even more benefits. The key to accomplishing an “up-sale” is having a customer in the first place. This is why a three month free promotion may be the best way for Sirius XM to market their service. They can get the customers in the door via the free promotion, and then up-sell them to a full subscription. Even if the take rate is 30% (as compared to an OEM take rate of 45%), it will be a substantial boost to the company going forward, because aside from more expensive royalties, the costs associated with the application are much more cash flow friendly.
Whether Sirius XM has this in mind for their launch of the iPhone application is unknown. What is known is that they need to make a splash with this from BOTH a consumer as well as investors perspective. Look for the iPhone application to be launched in Early June.
Position: Long Sirius XM Radio, No Position Apple.
I agree! Even if they do a one month free offering, that will bring in listeners. Then, they can periodically do a free week, free weekend, etc. Also, offering a free period a month before holiday time may give some the idea of offering it to their friends/family as a holiday gift.
Why not have all stellite radios that are in the cars that are off turned on for free? Here is my idea. Take a handful of stations and play them for free but you sell advertisement like regular radio. Sell the time we have much better stations then regular radio. Just like on free Internet stuff its pop up adds to deal with. If you want no advertisement then sign up. It can’t be any simpler. Here are some of the stations I would choose:
channel #24 great music
# 14,15,16
#1,2
#5,6,7,8,9
All specialty channels: coffee house, elvis ,gratefuldead, Bruce, Sinatra..
always leave on weather and traffic.
maybe cnn & fox they are advertise already.
why let regular radio have the advertisement we have better stuff and our channels always stay the same no matter how far you travel..
I think people would still sign up for Howard and commercial free radio but there are lots who won’t. So give them satellite with commercials. This seams like a no brainer we need to take over regular radio in order to win this battle. I don’t mind paying and will continue but I know my dad would never pay but it shouldn’t stop him from listening to the Frank Sinatra channel for free but with commercials (that sirius is getting alot of revenue from). Think about it..
Get this to Mel ASAP……..
Free? Maybe for a month, but 3 months?? No Way!
Oh, by the way, will it be available internationally? If so, I don’t think we have any problem with exposure. We just want to be the most downloaded app, which we will be – if the content is as great as everyone keeps saying it is…
Which brings me back to your “3 MONTHS” idea. How about spending some bucks on advertising and making some cash on Day 1. Consumers need to know 2 things; How great it is, and Where to get it… If nothing is spent on advertising, then kiss it all good-bye. Nobody will “try it out” unless they know how great it is – and without Advertising people are NOT going to download it.
Q: If a tree falls in the forest, does anyone hear it?
A: Only if someone tells you where it’s going to fall.
ADVERTISE. – and, I’m not talking about 10 sec in a Toyota ad…
I concur. DTV/DISH do this is as well to existing customers with movie channels for a period of time. Offering a free trial would be a no lose scenario for SIRI.
In my opinion 30 does not give an ample opportunity to test drive the product. There are applications I have downloaded, used for a few minutes, but did not get back to them for a week or more.
I think that the “free” aspect of this has to have value. I get offered additional channels on my FIOS for 30 all of the time. My response…..NO Thank You. It will be a pain to remember to call back to cancel if I do not like the trial, and I don’t know how much actual use I would give those channels in 30 days anyway.
Three months has a VALUE…..30 days does not. Just my opinion
30 days is more than enough time to get hooked.
I agree with the need to advertise it. I have never seen a tv commercial regarding Sirius…ever. I have cable television and have the mid grade package (not Basic but not the Top Tier either). I have never seen a commercial during a football game televised on Fox for example, or on the CNN channel. Have I missed them for some reason? They NEED to get this Appple ap out there and build up interest. Is there a reason for their lack thereof?
I’m sorry but 3 free months is insane! I would cancel my sub for those 3 months and just listen off my phone. Now perhaps you give a week away for free. All you need to do is get people to download it. I agree with getting the app on the popular download list. The point here is if you get people to download it they will make up their minds in a few days or a week if this is a service they are willing to pay for. If not, they should move on and so should Sirius XM. 3 months!? Yikes! “This is a cash flow story…” Which way do you want the cash flowing Savery?
a few days to a week is not enough time for people to make up their mind. It might be enough to get them to start liking it… the next few weeks, to another month is when you get them forgetting they are using a “trial service” and it has become part of the daily routine. That is when you stand a better chance of converting a trial user into a subscriber. 3 months sounds like a lot, but if they are going to make the most of this launch, that is what they should start out with. They can adjust later. \
Oh yeah…..I do heavily agree with Tylers thought of offering it free for some time (30 days would be plenty). Of course it is too good of an idea for Sirius to actually do it so I do NOT expect it will happen at least for several months depending on its success.
I still don’t understand why not offering a week here and there of free sat radio on the radios that are dormant out there. If its a technical issue that would cost many dollars I would understand but they have the radios out there, get them to be used!!!!
We know that in the OEM channel, a 3 month trial delivers between 45% and 55% take rate.
The company can monitor their sucess over time and adjust the time of the free trial according to their success.
The key is that if that the freebie needs to be worth while for the consumer. If they start out too short, they may not get the response numbers they need.
The LAUNCH is the key. and they can not afford to miss the boat in the eyes of the consumer. From this standpoint, it is more important to satisfy the consumer than the bottom line. The bottom line will follow in due course.
Sirius XM needs to be a “most popular” download.
Interesting article, however, I must admit, I was never under the impression that they were going to ask a fee. Seems like small amount of money to be bothered with when the app only costs a couple of grand to develop.
Jimmy…..
The app download is not the issue. It is getting the subscription. The app should be free. Anything other than free would be foolish. I am referring to giving the subscription for free for a period of time.
Tyler, I of course agree with the free idea. I think 2 or 3 months makes sense. But as the 2nd blogger, Nazareth makes mention to doing the same w/ the idle radios but in a free commercial programming format. I’m sure everyone is tired of me making the same old plea, but what your proposing isn’t that different from the idea of utilizing the dead dash ornaments into a chance of getting some adv. revenue and last but not least the opportunity for an “up-sale”. I’ll bet if this does come to fruition and the day it is announced this stock will go up 25%. An opportunity to reach millions upon millions of listners? What am I missing? Just don’t get it.
Any channel that would be offered free would not be a good representative of the real good content of SXM.
Would the FCC have an issue with uncensored content being free?
isnt’t the OEM free trial actually paid for by the dealer?
There is already an online free trial for 3 days. 3 months is way too long.
I just wanted to say I didn’t read this article. I can’t bring myself to read another article about the iphone app.
DITTO Doobz…………………..
Hi,
This is my first post after reading the articles and comments here for several months.
Why not have one always active channel ( one on XM and one on Sirius ) for ALL sat radios that has samples of all that is available on both Sirius and XM. This would play 24/7 ( a 24/7 advertisement ) with the cost of each plan and the number to call to subscribe. It is such a waste of those millions of turned off radios. Something like the above should be done to get the subs back. This is a very large loss of revenue that doesn’t have to be. It seems to me a stockholder (250K++ )and a busnessman, the cheapest route to getting the sub count back up with a targeted approach. To me, this avenue appears to present the easiest, largest and quickest potential improvement in sub counts.
Replies welcome!
George
This is one of the most intelligent posts I have read on the future of SiriusXM. There should be such a channel 24/7 advertising the company and the different choices one has with a subscription. It is really a no brainer when you think about it. Will it become a reality? We will have to wait and see, but with every passing day, this opportunity is leaving unclaimed revenues hanging in the balance. I believe that Liberty has voiced a position similar to this idea, but its time is not yet apparently.
George, I agree with this concept 100%–great post!
Long SiriusXM
Let’s just not get carried away with this advertising ideas. Company should focus on branding (it has), advertising (it’s doing this by word of mouth – and that’s good but not enough); retain current customers and make the radio experience easy to obtain for prospective new customers (iphone app will do that). Free download – agree.
Free iphone subscription for current Radio sub
Free subsription over 15 days – disagree.
tyler, i agree with 3 mo. , it will reel in a much larger #.
Couldnt agree more. This is what ive been saying on this site for months. If you give the app away and charge a 3 dollar a month fee for the service youll find people beating down the door to get thier hands on this app. There is no question making this a cheap alternative will work. They stand to do better by this than by trying to charge some expensive fees for sure. Let millions download this app for free, Give it a trial period even, Then charge 3 bucks after so long and i bet you that you have about 500k subs at least. This would offset any damages done by the sluggish economy. Give it away SIRIUS XM!
make a deal with the cell phone service to have it incorporated into thier phone bill. easier billing for the user and it’s lumped in with all the other services they are paying for.
I think 30% take rate is too agressive. Too many people will download it just because they download everything under the sun. Some will buy, but I don’t think 30%. No doubt it will be a much needed revenue boost though.
Free Activation + Free T-Shirt with each App Download and 3-Month Pre-Paid Sub.
and one of those $15.95 dvd/movie free(“stock slam scam” claiming wall street fraud and sirius-)
…and a turkey and a toaster.
The other thing is that if they are smart ( thats questionable at best) THey will have left room in the bottom portion of the app to sell some ads. This would still allow for ad free content while selling a few ads too. I = brainy smurf!!
3 months… sounds good to me.
Get that thing DOWNLOADED!!!
Tyler is 100 percent right here.
Old angle, just glad its getting covered.
man, i hope siri xm doesn’t fuck this one up!!!!!!!!!!
I still believe AT&T buys both Directv and Sirius….Malone just happens to have relationships with all 3 companies.
just as long as apple doesn’t do anything stupid! like make the app only work for WI FI, like they did with the slingbox app.
worthless
Rest assured, Apple and Sirius will screw this up.
Sirius giving the app away for free is the stupidest thing I have ever heard. Sure pandora and all the others are free. But Sirius is a completely different experience. I personally am not a subscriber anymore, but can’t wait for the app to come out. I’m planning on signing up asap and enjoying sirius anywhere I go … I will listen in car, home, work, play, boat, wherever I want, train, bus, biking, camping, running and this one is my favorite, I’ll listen to it while waiting… this is going to change everything and tons of people will jump on board. I get bored listening to a lot of those other apps, never with sat radio, so much to offer comedy, music, sports, news, it’s all there… I can’t wait!
The other thing is that if they are smart ( thats questionable at best) THey will have left room in the bottom portion of the app to sell some ads. This would still allow for ad free content while selling a few ads too. I = brainy smurf!!
When the hell is it coming out? It’s ridiculous that they haven’t released it yet! What are they waiting for?? I bought the $10 app pocket tunes to listen on my iphone and while it works some of the time, I am very much looking forward to this one.
They already screwed the pouch when Apple and Sirius denied NiceMac their time to shine.
Oh they messed it up alright! No Stern Show! Check this out:
“Some select programming, including MLB Play-by-Play, NFL Play-by-Play, SIRIUS NASCAR Radio, and Howard Stern, will not be available on the iPhone and iPod touch. Listeners will continue to be able to access that programming through the platforms they are currently offered on.”