By:  Gino Lattarulo

While all of  us so called experts obsess, analyze, and give opinionated comments about the success or demise of Sirius, I think there is a single question that should be considered above all else. Are there enough people  willing to continually pay for radio as they do cable TV? As one of the people who is willing to pay for it, and I mean forever, let me tell you why I can never go back to terrestrial radio. It boils down to one single factor; I don’t have to worry about losing content because I am too far from the transmitter. That’s it. Weather I am in NY or LA, I get the same station 24/7 .  Now what about other people? What winds their clock to keep them paying for it?  Take sports fans for instance. If a Giants fan lives in Florida, terrestrial radio is out. Even in upstate NY you have to mess around with 40 different A.M stations to get continuous coverage.

A lot of naysayers are condemning Sirius because of available free music via sites like Pandora and Grooveshark. In truth, I love both of these sites but free Internet music is not the death of satellite radio. Not even close. Music is only one part of the satellite model. You might as well say that free Internet music will kill terrestrial radio because of the high cost of advertising. Not going to happen. Because believe me, Internet radio may be free to the public, but it takes  major revenue  to pay ASCAP and BMI music royalties. Do not be surprised if  you see those web sites with their hands out looking for subscriber dollars  in the future.

So we are back to the question. Are there enough people willing to consistently  pay for the content that Sirius provides? Once the auto industry gets back on a steady path I think there definitely will be  more than enough. Now, whether or not subscription rates will remain the primary source of revenue is a different story. It would not shock me in the least if Sirius changed the landscape a bit and adopted the Time Warner and DirectTV model by using both subscription dollars and advertising to pay for premium content. With all the content Sirius has, maybe ‘ol Mel can also start thinking about syndication resales.

Like anything else it boils down to how much someone will or will not pay to obtain a  product. I would never pay over $50.00 for a pair of sneakers but have no problem shelling out $200.00  dollars for a pair of shoes. I own a $150.00 pair of sunglasses and a $10.00 watch .  $ 450.00 for a playstation 3 ? No problem. You want HOW MUCH for that cell phone?? Forget it, I’ll buy one on Ebay and swap the sim card. I would never pay what they are currently asking for an iPhone because I have no interest in cell phones over and above their basic function. I always take whatever free phone comes with the subscription. But that is just one person’s point of view. Obviously the iPhone is a successful product. Otherwise AAPL would not be moving them faster than a Miami drug dealer sells yayo.

The point is that when it comes to commerce, it  is all about what is important to a particular person that determines how much they will pay for a product. Many people are adamant about refusing to pay for satellite radio when they can get free music on the Internet. Others like myself pay for satellite radio  because of specific content. That is what makes diversity so great. Siri just needs to find the best way to grab their chunk of the 300 million people in America to achieve what every company longs for. Growth.

Disclaimer – Long SIRI, no positions in AAPL