As a Sirius XM investor I can remember the day when 100,000 subscriber milestones carried importance. Now, seeing a longtime Internet Music company like Rhapsody make such announcements seems almost humorous. When I read the headline my first thought was to chuckle. Then I looked deeper and saw that what Rhapsody has done was get back to a point where they were at two years ago. That’s right, Rhapsody was at 800,000 subscribers in Q1 of 2009.

After peaking in 2009 Rhapsody began to fall with the economy and hit a low point of 650,000 subscribers. At one point some even felt that the company was on a fast track to failure. Now, two years later the company has successfully navigated the difficult times and kept itself viable. Rather than chuckle, perhaps Sirius XM investors should be thankful. If Rhapsody is growing now while on virtual life support certainly the much larger Sirius XM will see a turning of the tide as well.

Yes, massive subscriber numbers over 1 million are gone, but adding 400,000 per quarter compared to Rhapsody adding 150,000 in one year means that consumers are once again willing to pay for content. Even if you consider that Sirius XM is only adding 120,000 self paying subscribers per quarter, growth is happening, and if Rhapsody is moving up Sirius XM should be able to do it faster.

Position – Long Sirius XM Radio