Sirius XM and GM Hook Up For Interesting Deal
The fact that satellite radio comes installed in many GM cars is not anything new. GM was among the first car manufacturers to include satellite radio installations and promotional subscriptions in cars, and there are perhaps more GM cars with satellite radios in them than any other brand. The relationship has been good for both companies.
Typically GM cars equipped with satellite radio come with a three month trial subscription that allows consumers to get a taste of all of the content Sirius XM has to offer. GM pays for a portion of the three month trial, and receives a revenue share if the subscriber elects to become self-paying at the end of the trial.
It now appears that GM is sweetening the deal for consumers and using satellite radio as a hook to get people to buy the 2011 GMC Sierra as the company gets to the business of rolling out the newer model. Right now consumers who buy a 2011 GMC Sierra get a full year of Sirius XM. Better yet, they get the XM Premier package, which allows these buyers to get the likes of Howard Stern and the NFL as well. If a vehicle is equipped with their DVD based navigation system, one year of XM NavTraffic is included as well.
We are finally seeing Sirius XM and automakers take these deals to the next level, and hopefully we will see more of this in the future. Longer promotional periods have happened in the past, but the addition of the Premier package and Navtraffic benefits are something new. From a marketing standpoint this makes perfect sense. Why not let the consumer experience everything so that you have a better chance of getting them to buy it all when the promotion expires?
For decades cable and satellite television have implemented such a strategy. They give you nearly every channel possible for a period of time in hopes that you will find that premium content compelling enough to keep when the promotion expires. Certainly some will keep the premium, while others will simply keep the basic plan, but the key is getting as many to the premium as possible. One of the best ways to get people to a premium package is to let them fall in love with some content that is only available on the premium tier. When it comes time to become a self paying subscriber, they will want to keep the services they are used to.
Another interesting thing about this deal is that it is being heavily marketed to consumers with advertising spots on television networks across the nation. The tag line is that you will get one year of Sirius XM including every NFL game of every team. Great concept here. Promote top notch content like the NFL, and when the promotion expires next year the NFL will be just getting into gear again, making it a harder decision for the consumer to downgrade.
It is not clear whether it is GMC or Sirius XM that is “paying” for this program, but from my perspective it looks like GMC is paying more to Sirius XM to sweeten the deal on a 2011 model. Hopefully we will see more campaigns like this with additional GM models as well as other manufacturers.
Position – Long Sirius XM, No Position GM
Great promotion. Just like DTV with the Nfl Package.
Buy the dips. Sell the rips.
great news this stock is on sale.buy buy buy
Pushing premier here, along with the free preview that ends today makes me wonder if… what if the price hike comes in the form of SiriusXM Permier $16.99… that would “move the needle!”
The only consistent direction SIRI is moving the needle is DOWN
$1.67 [Direction] -$0.05 (-2.62%)
Quote as of 4:00 PM EDT on 09/12/11
Sirius XM Radio
NASDAQ:SIRI
Great article, Spencer. In fact, I only have a minor (pet peeve)comment. In your first paragraph, “radio’s” should not have an apostrophe. That is reserved for the possessive only in this context.
Thank’s for thi’s, ‘Spencer. ‘siriu’slyrick
I recently bought a Honda and received the (XM) Premier Package for three months. In the past, I was a 5 year subscriber but canceled it after the merger because of sound quality and programming degeneration. You investor type folks will surely be happy to know that my re-evaluation on the service has changed my opinion – it’s worse now than ever! How can you folks listen to that HORRIBLE sound quality. It really could not have a lower bit rate. My daughters taking doll sounds better and that is not an exaggeration. Good luck with your stock.
Denny,
My thoughts exactly.
My wife just got a new car with Sirius-XM for 3 months.
I gave her a complete schedule and even set some presets for her.
She told me she tried Sirius and wasn’t impressed.
Her vehicle comes with built-in USB connectors for Flash Drives.
She keeps a USB drive in her vehicle and listens to what she wants.
She also uses the iHeart Radio stuff and likes it.
Sirius-XM simply can’t compete.
It’s outdated technology already.
It’s funny the 2nd largest subscription based service just can’t compete. Laughable. Everything is going the right direction at sirius even as the economy is knee deep in mud. Arpu, Margins, Subs, Content, while debt will continue to dwindle.
And I still haven’t come across anyone who wasn’t impressed with what Sirius puts out. I do however know people who don’t subscribe due to not really caring about audio entertainment…..not because the service.
I don’t know what either of you are talking about. The sound quality is just fine, and this is from a head phone wearing hi fidelity person from the 80’s (when music was real).
Siriuslylong,
It is common knowledge that the content is compressed to minimize bandwidth.
If you can’t tell that the audio is of less quality than standard MP3 then you are no Hi-Fi person.
+1 It is barely medium-fi, nevermind hi-fi.
Mr. Long, You must have been playing that real music REAL loud with those headphones. Go back to sleep.
BTW, The Premier Package was on for a week. Now, with no notice, it’s now just the “regular” package.
21 million and growing can’t be wrong. Maybe your just cheap
Let’s see what happens now that they announced the price increase.
I’m sure the customer service will continue to get worse.
actually they recently hired a company called Rightnow to manage their customer care. Customer service will be getting significantly better.
Hanifan, As far as customer service goes: I challenge you to communicate a VIN number to Assam or Pradesh. It was very painful.
Franz, Millions have been wrong before. And you are wrong now.
Denny it’s fraz and I’m not wrong mel just increased guidance for 2012
No Franz, you’re still wrong – on both counts. You can, in fact, have 21 million stupid subscribers that are ignorant to quality and will blindly pay for poor service; and I am not cheap – I just don’t buy junk (though I have been in a Dollar General store from time to time). My original point was the service quality (or lack thereof) and I hoped the stock holders do well considering the questionable service.
Your second lame attempt at a comment was “Denny it’s fraz and I’m not wrong mel just increased guidance for 2012”. I don’t see your connection of 21 million service customers and stock holder guidance. Do you think that each customer is also a stock holder?
Your original comment should have been “The x numbers of share holders are confident that the stock will do well regardless of the poor quality service that they are selling to 21 million stupid subscribers”.