The SiriusXM business model

[DanTSX]

This was discussed last evening with Art.  Who, depending on your opinion of him, is either a visionary that understands where radio and the concept of audio talk shows as we know it is heading in the iPhone age, or he is an out of touch old fart that cannot comprehend that people use things without dials, tubes, and humming to hear him, and can listen later without the use of a c. Crane cassette thingy.   Now that I barely got that near-run on sentence out, what are your thoughts on the SXM subscription model?

It see clear that they have already target a primarily mobile audience.  Meaning they have largely given up on converting new customers for home reception .  Noting this, their programming would naturally follow driving habits further alienating daytime and prime time customers in favor of commute times and the overnight long haul.  It is clear where SXM is aiming their customer conversion money, and it is in cars only.  SXM has struck new deals with Auto manufacturers to extend demo periods on new cars, and create demo periods for certified pre-owned autos.   For all intents and purposes, they have abandoned the home mArket.

Home listeners would rather stream.  This is a fact as wifi and the "internet of everything " continues.  Smart phones, tablets, smart TV's smart fridges, etc.  no longer is there a need to have a SXM receiver in the home.   SXM home receivers always needed an antenna placed outside of at least in a window in clear line of sight to one of the birds.   I canceled once because my he was in a low spot and the hills had tall spruce trees about 10 degrees over LOS to the birds and I couldn't get  signal.  SXM's current t streaming is an ancillary backup service for
It's inception.  It was never designed to Handle the traffic assigned to it now, or in the future.  Expansion of a new streaming method and network is something that the board will be forced to consider spending the capital on.  If not they will be stuck with truckers who slowly convert to streaming from mobile devices in this increasingly connected world .  ( one thought about truckers is that they are All beginning to be in constant sat or cellular data with their dispatch and logistics management centers anyways.  The data stream to the trucks is quickly becoming universal on omnipotent.  In fact long haul trucks will be the first driverless vehicls on the road in 20 years.)

Pricing:  SXM's pricing scheme has followed a corporate strategy thAt I have seen many a time before, and that is to try to be premium and sell add-ons at a Premium.  This will backfire.  The revenue per conversion will go up, but overall conversions will go down.  And existing listener base will dwindle as standard content is ignored for focus on SXM's incremental value added services that should be in a standard price.   The price is too high to win new membership but revenue would take a severe hit if prices were reduced.  SXM should had reduced prices years ago to near nothing And relied on add revenue more.

I'm pinching one out right now so this is obviously not a complete market analysis here.  I did not look up any investor relations mAterial for SXM but then again I usually am more right when I fly by the seat of my pants anyways.

What should SXM do? 
Capitalize on the Sat recievers in 90% of the cars made In the last 10 years.   Free, no cost live listening on all sat receivers.
Charge a nominal premium for archives access and playback of past shows. ($7-10$ month)
Free live streaming (banner ad and trailer supported)
Increased bandwidth for live stream of archives to subscribers
No ads in player for subscribers
Continue in office type "Muzak" replacement service no commercials.  Streaming and sat

Rationale:  face it, SXM is counting sign ups in two areas, new car sales with complimentary subs, and when they sign someone like Art bell.  Outside of that, SXM becomes a cultural black hole.  People who have not been a subscriber do not suddenly say " hey I haven't heard stern in 8 years, I could use a potty mouthed asshole and his living quivering laugh track in the morning".  No.  Stern has fallen off the radar to everyone but non-subscribers.  SXM has created a walled garden.  Anyone on the outside considers inside content irrelivent unless they have just moved onto the pay service.     Streaming provides ad revenue from banners and Google Adsense type advertising.  This is largely disruptive to the listening experience.  A leader ad in audio or video is also possible before streaming content starts.  This is similar to YouTube trailers.  Further, local targeting could be achieved via geolocation on ad time reserved for local ads to be pushed to local markets simultaneously.  This would bring people into the SXM environment and give them access to the ads which translates into added value for advertisers.  This is the only way for SXM to grow, or even remain competitive.  This would also place SXM truly into direct competition with terrestrial radio, which had become syndicated to the point that it is a like product anyways.  SXM could offer to even promote or allow local shows to foster and develop on XM.  There is a burgeoning podcast culture that is bubbling below the surface and terrestrial goons will never pick it up.  If SXM brings some of this talent In, it would take some of the pressure and reliance off of the stale big name, overpaid, prima-donnas that SXM hired years ago and are just waiting out their multi-million $$$$ contracts to move on.  Face it stern is an old fart 1990's grade fart generator.  O&A is marginally better but not breaking any ground.  10 year contracts mean you are 10 years behind the culture and times by the time you can react to this stale content.



Ok that's pretty stream of thought there.  I am actually quite used to putting such proposals and analysis together in coherent packages with pretty graphs, cited material, etc, etc.  so If you SXM guys want to hear more, I am considering all tenders for my talents.  Please PM me here and we can discuss compensation and deliverables.

[DanTSX]

TLDR:

SXM has made it's own star content culturally irrelevant
SXM should become a free service.  Cars everywhere will hear
SXM should offer a pay service for archives access
SXM should promote popular podcasts to encourage alternatives to stale overpaid shock jocks
SXM should invest in streaming technology
SXM should hire me to unfuck them at approximately $170k per annum plus performance milestone compensation.