appsappsWhether Sirius XM investors like it or not, iTunes has become a sort of measuring stick of what is hot and what is not. If you can make it on iTunes, you have your hands onto something. For years, Sirius and XM fans have seen a partnership with Apple as the holy grail of determining the success of the company. A partnership never came to fruition, but Sirius XM did finally release an app that is available through iTunes.

Early success of the Sirius XM app vaulted it to the number one music download on iTunes. Within a couple of weeks, the app surpassed 1 million downloads. Now, a week later and much to the chagrin of investors, the Sirius XM app has fallen below Pandora. At this point Pandora enjoys the #12 position and Sirius XM sits at #15.

What this proves is that the competition on Internet radio will be strong. It also proves that Sirius XM, even with strong brand recognition, needs to do as much as they can to remain on top. To do that they need to find a way to compete with the high points that attract people to services such as Pandora. Pandora sports customized channels, something that Sirius XM should consider. Pandora is virtually free because of advertised support. This is something that Sirius XM can not compete with. Thus, Sirius XM needs to focus on exclusive content as they work towards improving the Internet service to offer more capabilities that are appealing in services like Pandora.

Launching the app without Howard Stern was a mistake, as he and his channels are a big driver for satellite radio. Until the Stern mess is cleared up, Sirius XM needs to point out that the other exclusive content available on their Internet service is worth the price of the subscription. This can only be accomplished through good marketing, and exposing people to the content. One week of free service is not enough time for consumers to evaluate the value of becoming a subscriber.

In my opinion, Sirius XM needs to increase the free trial to a point where they can at least capitalize on the word of mouth impact that apps tend to have. If a consumer downloads the app, and does not get a chance to experiment with the service and expose themselves to the value of a subscription, then that is opportunity lost. The "gotta-have-it" factor is diminished by the fact that many simply can't even offer an informed opinion about Sirius XM.

Sirius XM also needs to get good channel descriptions on the app as soon as possible. Consumers don't know what the Loft is, nor Faction. Some channels are self explanatory, but others simply leave someone guessing. Sirius XM needs to feature their D.J.'s, and talent. Consumers need to be able to navigate the app as easily as possible. The app needs to provide a wow factor that encourages exploration and participation.

The fact that you can get Sirius XM on an iPhone is great. The company needs to continue to improve the app and the consumer experience in order to maintain a competitive advantage. Presence on the top of the iPhone charts is critical to the perception of consumers, and consumer perception is critical to the success of Sirius XM's app. It is a vicious circle, but if Sirius XM wants to stay in the game, they have to dance the dance.

Position - Long Sirius XM