iPhone Application Will Launch Sirius XM
For those that have followed satellite radio for a long time, Apple has always been seen as a brass ring of sorts. Over the years many investors were clamoring for a deal with Apple that never came to fruition. It just seemed right and natural to combine the live aspect of satellite radio with the features of the iPod and iTunes. iPods lacked a music discovery aspect that satellite could deliver. Perhaps the fact that a deal was never done was for the best. Apple would have demanded their pound of flesh in terms of revenue share, and either Sirius or XM, competing staunchly for an advantage, would have been forced to whittle away yet again at the bottom line.
Today is a different day. We now have Sirius and XM merged, and the iPod has graduated to the iPhone. No longer will iPods need to have satellite radio chipsets installed at a cost to Sirius XM. Instead, the service can be delivered over the Internet and directly to iPhone and iPod touches.
In their quarterly call Scott Greenstein hinted that the application would feature the ability to stream more than just the Internet feed, but also stream additional channels for talk, sports, and news. Greenstein’s comment likely was overshadowed by the fact that the company actually announced that the long awaited application would actually be delivered in Q2.
Many may not be aware that the Internet feed of satellite radio excludes many channels that are available in the standard satellite feed. News channels such as Fox, CNBC, etc. are not in the Internet package. Nor is there any live sporting coverage (Notre Dame Football is featured) or traffic and weather.
It would appear that what Greenstein insinuated was that the iPhone application would deliver a more robust line-up. This is potentially big news. Imagine if you could catch your favorite teams broadcast on your iPhone. Wouldn’t it be great if channels such as Fox news were included in the service? While the company was not specific about the content offerings that would be included, they did say that the offering would be “enhanced”. Perhaps the timing of the iPhone application and the rumored Baseball news becoming available to Sirius Subscribers has some merit.
In preparation for this launch, Sirius made some great business decisions, and dropping the Internet feed for a standard subscription, while raising the Internet feed sound quality was the first. Now, if you want to listen to Sirius XM over the Internet, you need to pay an additional $3 per month. Yes, consumers may feel a bit scorned, but from a business standpoint, the move makes perfect sense. If the iPhone application delivers a level of content that rivals the satellite delivered service, subscribers that already have iPhones will jump at the ability to combine their satellite radio service into their cell phone. This will deliver an additional $3 per month in revenue, and increase metrics such as ARPU (Average Revenue Per User).
The next positive aspect of the iPhone application is that there is no satellite radio chipset to subsidize, nor does the company spend money on manufacturing and distributing radios. This will trim costs substantially, and have a positive impact on the SAC (Subscriber Acquisition Cost) metric. The iPhone application does not require the company to pay for space on retail shelves, and does not require a sales force. If your iPhone breaks, you will call AT&T, and not Sirius XM customer service. All around, an application for the iPhone and iPod touch saves the company huge amounts of money.
What does the company do with that saved money? Well, they can take some of it and market their new iPhone app, but the real brilliance here is that Apple markets itself. Sirius XM does not need to sell iPhones. They simply need to make the millions of iPhone owners aware that an awesome new application is ready and waiting to be downloaded. A simple yet cost effective ad campaign can perhaps deliver more bang for the buck than anything previously seen (with the exception of the one year Stern promoted Sirius while still on terrestrial radio).
The iPhone app will also appeal to non-subscribers at the existing subscriber price of $12.95 per month (plus perhaps a small premium above that). If you have an iPhone or an iPod touch, do you really want to be tethered to yet another device? Now you wont have to be. You now have an all-in-one solution. Properly marketed, Sirius XM could garner a whole new set of subscribers to the pool.
The iPhone also has positives in terms of the consumer. The consumer does not have to buy a radio. The entry cost to get involved in satellite radio is no longer a hurdle because there is no radio to purchase. Consumers also do not have to worry about getting a radio installed or running an antenna. Becoming a satellite radio subscriber is now as simple as downloading an application!
With millions of iPhones and iPod touches out there, the potential is substantial, but before people run off with visions of 5 million new subscribers in their head, let’s apply some realistic parameters. The iPod phenomenon is biggest in the city. Walk around New York, and you see personal music players, iPhones, etc. everywhere. New York is a city where people don’t drive, the take the train or a taxi. The appeal in a city such as New York will be huge. In the suburbs, people tend to drive more, and thus, get a chance to listen to music, satellite radio subscription, etc. on their commute. These people, in my humble opinion, are less likely to make the jump.
The bottom line is that an Sirius XM iPhone app will be a revenue generator as well as a cost saver. that is a powerful combination that can not be ignored. Look for the iPhone app to be launched in early June.
They should have released this a long time ago might have helped out the sinking ship
How about the Intl’ reach that the iphone app will have?
My question is that will this iphone App be available to ALL iphones WORLDWIDE? I mean, will iphone users in the UK or Japan be able to download the SiriusXM iphone App and then become subscribers? Or will it only work for American users?
Cause if this is WORLDWIDE….it will be HUGE for SiriusXM.
Tyler,
Appreciate the article and I’m looking forward to the release of the iphone app as well. I have to take issue with your feeling that Greenstein was insinuating that sports would be coming to the iphone app. Here is Greenstein’s comment from the transcript:
“Following Jim’s comments regarding the launch this quarter of the SIRIUS XM app for the iPhone and he iPod Touch, SIRIUS XM’s unique content will soon be made available to millions of users of these devices. The SIRIUS XM app will deliver an expanded programming lineup that includes SIRIUS XM’s exclusive sports talk, news, comedy, and 100% commercial free music channel, as well as new talk, comedy, and music showcase channels.”
The last sentence is key especially the placement of the comma’s. He’s referring to “sports talk” not sports and talk. He does seem to be pointing towards expanded talk, comedy and music showcase channels. The new music showcase channels might be pretty interesting if they are looking for a way to get live concerts available as a PPL or as part of the regular monthly fee.
We’ll see soon enough. Definitely looking forward to June.
…regarding the MLB on sirius, just spoke w/ customer service and asked if I was able to get all the games on the best of xm package. He did say no, but that “we have received a memo” stating that it will either be this season or next because the negotiations were done prior to the merger. He also said “they are in negotiations” and we will be sending an email to our customers as soon as it is known.
If MLB wasn’t going to happen, it seems to me they wouldn’t be allowing their CS reps to give even a hint of the possibility. He was friendly and curtious but didn’t try to sell me the package anyway…good because not rude in pressuring, bad because they need to upsell anyone they can.
just some info for you
great article tyler!
I’m pretty eager for this app. I was disappointed when Sirius moved the NBA to the Best of XM after the merger (I have a lifetime subscription on an older unit that can’t receive the Best of XM, so it felt like I was being punished for being an early adopter of Sirius.) It’d be pretty cool to be able to get these channels and whatever other content back with the iPhone app.
I do have a question – as a lifetime subscriber I do not pay for the online streaming, meaning I’m stuck with the 32 Kbps stream (I don’t listen to streaming enough on my PC to justify the $3/month.) Would I have to go ahead and upgrade to get the content on my iPhone? I would have no problem doing so if it meant I got all of this extra content – I’m just curious.
If this could be gotten worldwide/internet +Iphone App……it would be Revolutionary….to say the least….I just hope that we get a cut on Itunes downloads via Iphone/Ipod apps via sirixm….that will be potentially billions of downloads
Also if released this Q…I think it will go a long way to offset losses due to GM Chrysler etc
What about those of use that prepaid to keep the same rate and standard internet feed?
Will this app only work with the “premium” feed?
You can already listen to SiriusXM on your iPhone. Using the Pocket Tunes app you can catch web streamed radio such as SXM. I listen every day. However, it does only provide the music and no additional info or ways to purchase songs.
I have a concern though, AT&T just hamstrung the release of Slingplayer mobile by forcing Sling to limit the app to Wifi citing concerns over the 3G network usage. I am sincerely hoping the same does not happen to the Sirius app. However, I am assuming there are plenty more subscribers to Sirius Internet streaming than there are owners of slingboxes so it is a possibility that they would be concerned of the effect the app would have on their network.
I guess we wait and see.
Since I have a generation 1 Skyfi, what does this mean for me?
Lower monthly subscriber costs…. Probably Not
Improvement in programming????Probably Not
If I had an iPhone would I have to use a headset/earphones/buds to listen to the channels and how is the sound quality??
How much extra would it cost me to listen to SiriusXM if I tuned in like 5-6 hours per day with an iPhone? If I listened to SiriusXm 5-6 hours/day on an iPhine would that eat into my monthly allocation of minutes?
If I listened to SiriusXM on an iPhone 5-6 hours/day at my office or car could I hook it up to a docking station or an input in my vehicle?
Just called my local AT&T cellular provider.
Let’s see………
A. 200 – 300 bucks & 2 year contract for the iPhone
B. 69.99/month for cellular access(450 minutes/month prime time use)
C. The local store was unclear about accessing SiriuXM but said Slacker & Pandora were no problem.
D. No assurance that signal won’t drop out if you’re in a rural area.
E. They were not real confident about hooking up to docking units for office or car but said that would be extra.
With my multi-year subscription (which expires next year BTW) I’m averaging ~$8.00/month and I’ve had the same receiver since 2002 and use it in my vehicles & office. Laid out $120 for receiver(came with car kit) & $50 for home docking unit way back in 2002.
With the realization that this country could be headed to a less complex lifestyle and less discretionary spending habits, I don’t have warm fuzzies about this concept being a big hit as some of you posters.
But then again, I bought Sirius at around $7/share.
Seems to me SiriusXM should be focusing on keeping their current subscribers and making improvements in programming first. Shore up the base,etc.
Recondo,
The problem with what youre saying is that people arent going to go and buy an iphone just to have siriusXm. The people that already have the iphone for other reasons are going to be the ones that this is going to target. If someone does go and buy an iphone for this reason great. I wouldnt hold my breath on that happening. With MILLIONS of iphones and Ipod Touches being sold, I think it was like 35 million, Thats who sirius Xm is looking to target. The users that have the iphone in place.
Lastly, This will have international appeal. Anyone, Anywhere that has an iphone can enjoy this. I dont think it will be the end all and be all app that saves siriusXm but i could very well see 1 million users getting this app depending on pricing.
You could easily get 500k international people and probably the same number in the states. What this does is provides a gap filler for the subs that SiriusXm is losing during this tough economic time. Even if my projections are high if you got half that number youre still in good shape. Dont over estimate this app but darn sure dont underestimate it either.
Losing subs is the key word. a lot of that is disatisfaction with the way the company is running things and totally screwing up what once was a great medium.
I see you point and if it slows down the hemmoraging nothing wrong with that. Only thing is like you so correctly point out is discretionary spending. How much would an application cost or even if people would pay an extra $12-$15/month when the motivation hasen’t been there lately?
Like someone posted on another site, the core group of us feel betrayed and Mel & Co. are taking its most ardent supporters for granted. Actions speak much louder than words and these days my warm fuzzies for SiriusXM are fewer & fewer.
Never forget the power of word of mouth.That’s something that a lot of suits seem to forget.
Untill I see some improvement in the programming I can’t/won’t be the ardent fan/supporter I once was.
Recondo,
I understand you arent happy with the programming. I wasnt happy with what they did to a couple of channels that i liked either. I just found other channels i liked. I knew there would be some changes in the merger that i wouldnt like and everyone should have known that. You as a customer have the right to cancel if you want. Im still happy with siriusXm. I still think they have great channels and great content. The app isnt going to cost anything would be my guess. My guess is the app ends up being free and it will cost 3 to 5 dollars a month to have it work. Thats JUST A GUESS but it would make since to me.
If they try and charge 12 bucks a month they are making a huge mistake. They must reach out to all of these new people with an affordable solution. I do agree with you that alot of people arent the fans they used to be since the merger but i do think time will tell the story and i do think sirius Xm on down the road will make up for the mistakes made and offer just as good or maybe even better channels than before. In my opinion the company is just laying alot of ground work right now.
For Clarity….
My apologies for only getting to this now, but I have been traveling and in meetings all day. I am now at the aiport again, but wanted to make a few things clear.
1. The price for the iPhone app is unknown. However, the $3 monthly fee is in addition to the $12.95 that a subscriber currently pays.
2. Currently an Internet only subscription is $12.95 per month. Because this app promises to have more content, the price may be higher.
Tyler, do you think this app will work worldwide?
Tyler,
I feel if it cost that much Im afraid its going to be disappointing results. If they would offer this for a cheaper price than the cars subscription i think it would be a big win.
They dont have any hardware to worry with, they really dont have to advertise and they are already streaming. I dont see why they would need to even charge 12. If they are smart( and thats questionable at best) They would make the app to play ads at the bottom but not interupt the music and sell ads. Then lower the prices down and get as many subs as they can to join up.
Maybe you can add some more thoughts.
Great article Tyler! Just one thought – you wrote:
“In the suburbs, people tend to drive more, and thus, get a chance to listen to music, satellite radio subscription, etc. on their commute. These people, in my humble opinion, are less likely to make the jump.”
Perhaps the iPhone app is an attractive option for those that want satellite radio in their vehicle but are reluctant to purchase an after market radio and either install it themselves or pay for the install.
These folks might already listen to their iPods in the car through a cassette, fm or – even more prevalently now – a direct line in. However, instead of the iPod, more and more they will be listening to tunes through the iPhone of iPod Touch. Once the SIRIUS XM app comes out, all they have to do is download the app, pay for a sub, plug in and listen through the car stereo system.
No need to buy a retail satellite radio! This was one of my major hangups before I finally folded and bought a Stratus 5. Fortuntely, I used to install car alarms and car radios, so it wasn’t a big issue. But I can see why it might be intimidating for some people.
Being able to listen to your Sirius XM app through your Iphone that is attached to your car sound system will be huge. The only issue with this, I imagine, is whether the sound quality will be good or whether it might cut in or out or be choppy as you ride along. However, considering that I can usually stream other things on my phone while I drive – it should not be an issue.
Of Course, once there is much much great penetration in new vehicles of course this work around will not be necessary. But we are a long way from that and in the meantime, I think people will indeed buy subs on their iPhone in order to listen to SIRIUS XM in their car while driving in the ‘Burbs! That’s just my humble opinion.
ATTN: Mel Karmazin
“Build the iPhone App (Right) and They Will Come!”
I’m a current iPhone owner and Sirius XM subscriber who has downloaded a good number of apps to date — including Pandora. There are three keys to help propel sub sales for both the iPhone and car SatRad platforms.
1.) Make the app download available for FREE (just like Pandora). It’s like opening millions of car (iPhone) doors and letting everyone in to check out the dash (app display) and get ready for the test drive. How great is that!?
2.) Give all app downloaders a FREE test drive (3 to 7 day trial period) so they can experience the range of quality content that differentiates Sirius XM from ALL the other competitors. If they “try it, they’ll like it” – just like Mikey (a 40-50% conversion on the app trials would be HUGE!). Most people will be willing to pay once they hear what they’ve been missing. It’s analogous to dial-up vs. high speed internet – once you’ve experienced the difference, you pony up the cash to avoid the frustration of going back. The extra dollars will be justified after trial subs experience the CONTENT quality and diversity that NO OTHER RADIO ALTERNATIVE OFFERS TODAY!
3.) DON’T SUCK! All iPhone apps give downloaders the ability to submit up to a 5-star rating and text review. If the Siri app scores at or above Pandora and eventually ranks in Apple’s Top 25 Free apps — THE LAUNCH RESULT$ WILL BE $TELLAR!!!
A GREAT SIRIUS XM APP WILL GO A LONG WAY TO HELP PROMOTE (FREE ADVERTISING VIA APPLE’S IPHONE APP LISTINGS) AND EXPOSE PEOPLE TO THE SIRIUS XM EXPERIENCE! Sirius “ka-ching, ka-ching” if it becomes viewed as iPhone app “bling”
Why would they charge less???? Come on, it’s a GREAT service. If they charged LESS for more on the iphone then WHY would anyone choose to buy Sirius thru their car at their regular rate?
Sirius can’t start offering TWO ways to become subscribers with ONE being cheaper then the other.
The iphone App will be FREE….but to join the service will be their regular rate for new subscribers and an additional internet fee for their current subscribers. Thats just the way it’s gonna be. If you are an investor, this is what you want to hear.
Remember, Sirius has the CONTENT and service that warrants this. Yeah, Pandora and it’s ilk are FREE….but you don’t get nearly the same level of content or control.
Between SiriusXM’s continued internet exposure and the eventual car market recovery, they are well positioned to finally fulfill their merger synergies. As this happens, the stock will rise as Wall Street is FORCED to do a complete 180.
But it’s going to take time. Several more quarters at least of uncertainty fueled by bashers and negative bias from Wall Street. Anyone long this stock has weathered the worst when we hit .05 cents when all the analysts were screaming BK. Well…THAT DIDN’T HAPPEN. So now they are screaming LOST SUBS!!!….even tho those lost subs were promotional in nature, and Sirius actually BEAT the street. The shorts and bashers still have the Reverse Split card to scream about too this year. Trust me, they will continue to take advantage of the bad economy to help drum up FEAR.
But the longs have held during the worst and aren’t being shaken out now. Things bode well for longs and worse for the shorts as time goes on.
Long and Strong baby. Long and Strong.
“Lost subs=promotional in nature”??
According to “The Motley Fool”,approximately 10% of the lost subs were from automaker related issues, the remaining 90% were from the retail front which untill last year accounted for most of SatRad’s listener base.
Ask just about anyone who has subscribed for 2 years or longer and ask if they are honestly satisfied with the way Mel & Co. have handled things.
Have Mel or Greenstein ask me why I should renew my multi-years subscription when it runs out or if I would suggest anyone to subscribe with the way things are going. Give me a reason to besides the lame old chesnut “Well, its better than terra radio” to that I would answer which type of terra radio are you refering to? The great stations I now access via internet because Mel & Co. screwed up so much that I upgraded to DSL?
I’m a stockholdert AND XM subscriber I knew this merger would come to no good and that’s exactly what is happening.
The stock is going to have to go up approximately 1000% to get me back to where I was let alone my opinion towards this company as a customer.
Sure buy it while its cheap, make some money, and sponsor a crappy product & service while you are at it.
What goes around comes around.
I love that people feel the app will be free but I find that highly unlikely. Good for business? Yes, but since when do they know what they are doing? I figure the app will likely cost $9.99, with an outside chance at $7.99. But I would not be surprised if it cost $14.99 either. Tonight, I was going to buy the $9.99 Pocket Tunes app, also mentioned by Rook above (normsoft.com) but after seeing this alleged release date of early June, I will be patient (for a change) and wait a few more weeks. But free? Don’t hold your breath.
I just hope that they finally do give us Sirius subscribers the MLB. I got the Best of XM and then found out it was baseball-free. So what do I get – Oprah??? I don’t think so.
I know one thing that ticked me off, on my recent visit to NYC I didn’t need my Stiletto headset antenna to receive the signal, as apparently NY has much better coverage than we have in the LA area where I live. I was surprised when I was able to listen to my radio with just regular earbuds. How about spending some of the potential new income on getting better signals elsewhere like they have in NY. I still get some occasional dropouts on my home antenna and that’s not good.
Okay, I lied; sometimes, I’m just not that patient. I figured that it has already taken so long to get this thing into the app store that I figured the June date would likely not happen either, so I said screw it and downloaded the Pocket Tunes app this afternoon. I have to say, it works great. I was listening to Sirius within seconds after logging on. I signed into my Sirius account (lifetime member) one time and it remembers the info whenever I open it. This app also has hundreds of other radio stations to listen to, both terrestrial and internet – I’m listening to Beatles Radio right now and searching the web from the built-in browser so I’m more than satisfied. If the Sirius app somehow turns out to be free and any good, I’ll check it out, too. In the meantime, I have Sirius on my iPhone for only 10 bucks.