Sponsorship can offer many things that benefit consumers as well as corporations. Pandora made a recent announcement that they would have limited interruptions and more music on February 29th thanks to Lexus. The concept, straightforward and simple, almost brings us back to yesteryear when television shows were sponsored by companies for exposure.
Remember Animal Kingdom from Mutual of Omaha? Essentially the popular show was paid for through the exclusive sponsorship from an insurance company rather than a smattering of car and soap advertisements.
The concept of sponsorship and "placement" has grown over the years and sometimes can be done in the most subtle of ways. Ever wonder why E.T. ate Reese's Pieces instead of M&M's? Ever wonder why jack Bauer drove Ford vehicles on the hit television show 24? It was placement, or sponsorship that drove these decisions.
When I first invested in Sirius XM I wondered why the company did not consider such a move. Why not get Pepsi to sponsor a station and call it Pepsi Hits 1 instead of Sirius Hits 1? Perhaps the easiest answer as to why this didn't happen was that at that point in time Sirius needed Pepsi more than Pepsi needed Sirius. Things have changed and satellite radio is more prevalent now. Sirius XM would actually have something to bring to the table.
This article is not about Spencer telling Mel Karmazin how to run the company. It is about thinking outside the box, or visiting possibilities that might help the company generate more top and bottom line growth.
It was last March that Toyota and Pandora partnered up with the largest ad deal Pandora had made to date. Throughout the year consumers could see the Toyota partnership flourish. Toyota even features Pandora in their Entune system and in advertisements for cars. Now Lexus, the luxury arm of Toyota, is adding to the mix.
Sirius XM is sold as carrying commercial free music channels. It is a big selling point for the company, and justification as to why a subscriber might pay a premium to have the service. Certainly there could be an interesting debate about station bumpers and DJ chatter, but in the end it is commercial free. Many readers might be surprised by which audio entertainment company actually plays the most music, but that is a topic for another day.
The question at hand is whether or not Sirius XM could increase revenue by doing some sponsorships and/or placement deals. Would it be that offensive to have a music channel named after a sponsor? Would it shatter the image of commercial free?
What about the Sirius XM website? Would the company placing some ads or banners on the channel pages be taboo? Certainly I do not think most would mind seeing them, and it would help generate additional revenue for the company. Sirius XM's website garners a lot of traffic, and the company getting a check from a sponsor or Google wouldn't hurt.
What about the non-music channels on Sirius XM that do carry commercials? Wouldn't it be cool to have the Raw Dog comedy channel sponsored by Budweiser, or another corporation? Why not have a "limited interruption week on Sirius XM Stars that is sponsored by Geico?
Of course nothing is ever as simple as it seems. Perhaps the company feels they get more revenue from the ads they sell than going the route of a sponsorship, but a few banner ads on the website cost little to implement. No, the dollars would not be huge, but every little bit helps.
In summary, I think there are some avenues available to Sirius XM that may be worth exploring. Toyota has demonstrated a willingness to sponsor and if nothing else that is a feather in Pandora's cap. I am sure this would be a great cost benefit analysis to see. Sirius XM has a new price increase to drive revenue, but they could potentially be doing some more things to enhance that even more. Perhaps this is an avenue the company may explore some day. Why don't we get the ball rolling here by answering a few simple questions:
- Would you consider Sirius XM having a sponsor named station as violating the commercial free status?
- Would you consider some banner ads on the Sirius XM web pages as intrusive?
- Would you appreciate limited interruption by sponsorship on non-music channels?
- Do you think some of this is even worth exploring.
I look forward to seeing what the readers have to say.