By Lee Culp, Contributing Writer
Since the merger of Sirius and XM radio, there have been many advocates and skeptics about the value of the company’s service. On one hand, you have people who are absolutely fanatical about the quality and content of Sirius XM, and on the other are the people who denigrate it every chance they get, believing it will go nowhere. In the middle are the majority of people who know nothing of the service due primarily to a lack of advertising.
What all of them should agree on is that Sirius XM is a media platform that has a decent paying subscriber base, substantial contracts throughout the automotive industry, and a content line-up that is unique unto its own. It can also be said that Sirius XM has successfully avoided bankruptcy. These factors lead to the logical conclusion that Sirius XM is here to stay, whether or not they continue to grow or suffer.
Many of the skeptics believe that applications like Pandora and Slacker will put a damper on the growth of Sirius XM within the mobile applications realm, or maybe shut Sirius XM down altogether. The advocates believe that because Sirius is the number one music download application on the iphone with over one million downloads in just two weeks, that it will counter and crush the others. The reality is probably somewhere in between – Sirius XM, Pandora, and Slacker will all have a reliable subscriber base, turning profits for all of them. Who turns the most profit seems to be the real argument.
Now, one debate that has failed to be mentioned, and again, one that everyone should agree with, is that only Sirius XM is in a position to acquire lucrative government contracts with its capabilities. Satellite radio is the pinnacle of radio communications, the only one easily capable of globalization, and only Sirius XM has that capability – well, them and the U.S. Government. Now, the government is not in the business of entertainment, but Sirius XM is, and has a tremendous advantage over its competitors with the potential to enter the business of national security through government contracting. Critics and advocates should also be able to agree that not only does the company have the potential, but a tremendous advantage already, as President Obama recently appointed a former Sirius XM board member, Jeffrey Zients as the country’s newest Chief of Technology. Effectively, Sirius XM already has the ear of the government.
Imagine a satellite radio receiver replacing all the clunky, antiquated radios within the military aviation arsenal. This would condense the Vietnam/Cold War era radio packages currently in use into one, nice, neat package, reducing weight in the airframe, saving fuel and maintenance costs to taxpayers. Even the cumbersome survival radios carried by the aviators could be replaced with a sleek, slim version, improving ergonomics and giving our pilots cutting-edge technology to possibly save their lives in a downed aircraft situation. Sirius XM has the potential to become a one-stop shop for aviation communications. The aviator can now communicate worldwide, the taxpayers and government save a ton of money. It is a win-win situation for everyone. This concept can even be applied to civilian aviation.
Sirius XM doesn’t have to stop there. They can also design an earpiece receiver for the National Park Service. Imagine tourists getting a guided tour of Niagara Falls, Yosemite Park, Mt. Rushmore, and the Grand Canyon, all with a little portable earpiece. Stations would be pre-programmed, and one would only have to dial in the frequency displayed at America’s historic landmarks to heighten the sensations of their beauty. This same concept could also apply to sports arenas, the Olympics, or any event drawing a large crowd.
Communications is a constant within all societies of the world, and only Sirius XM is in a position to offer unique entertainment, national security, and globalization. Consider that Sirius XM already has already demonstrated its ability to help victims of natural disasters as an example. It is now up to Sirius XM to seize these opportunities.
Position: Long SIRI
National park Radio? You’re nuts.
Jeffrey Zients, Mel, Malone…let’s get going!!!!
Nice article and mostly possible. There is one large factor left out, however. After reviewing the frequencies available to Sirius XM for the FM-5 on the FCC website, I found a very large bandwidth available for video (approximately 1000+ channels). This in itself could be the reason that Malone has an interest in SXM, plus all the other possibilities. The FM-6 will be launched sometime next year and is supposed to have the same capabilities as the FM-5 (I have not seen the FCC frequency coverage of the FM-6 satellite). Until a launch is applied for and scheduled the frequencies won’t be public information, if things stay the same as they have been with the FCC.
Another possibility is to supply satrad to all of South America with the current satellites. The possibilities are enormous and your article points to this.
Thank You,
George
To the moon Mel. I appreciate where we were able to buy this stock but enough already. Get the share price up where it belongs……
Oh yeah…..NO REVERSE SPLIT!!!!!!! The shorts will eat it alive and drive us back to a nickel. We can’t have that.
We need to look beyound radio. Mel has said before that they are in the radio business but they are capable of sending 101010101 ( ie. data), whether it be radio, voice commo, or any other form of data. Check into GATM.
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Too bad all of these dreams and brilliant ideas never seem to come to fruition.
1 million downloads of the app to me only means that there is 1million subscribers w/ iphones who wanted to try out the app. Maybe 50k will pay the extra $3 to continue the service but why when it’s already in their cars and on their computers at home/work. I doubt there are more than 50k non-current subscribers out of the million that have downloaded the app. It’s being pushed on the sirius xm channels all the time, to current subscribers! not nonsubscribers.
regarding subscriber #s, everyone needs to keep in mind that these #s are not individual people but active radios. I have 4 active radios. 2 I pay for, 1 is a radio a tenant left behind after moving out. I plugged it in to my car and it still works even after having it for 7 months. The 4th is in a car we recently purchased that was salvaged from a car rental company. Had the car for almost a year and it still works. Point being, there may be close to 20million radios active, but maybe less than 50% of that # are actually individuals.
then there is the shareprice. we continue to get fickle pops here and there w/ no long term continual ascent. we hit .48 and plummet 30% in a few days. A reverse split is coming…there is no way the shorts will allow this to go back over $1. They’re shorting it now and will continue prior to the rs and then again after the rs.
good news is I’m too stubborn to sell and need this to get close to $2 to make a dent in what I’ve lost. Anyone want to guess when that will happpen? We are current at a m/c of just over $1.5 billion and some claimed we should have been at $20billion after the merger? Say we get to be 7xs current sales, that’s 14billion putting us at a s/p of almost $4. Possible? I doubt it but sure would be nice!!
Who’s to say that Sirius isn’t already working for civil defense? The spanish flu started out much the same way as the swine flu. It began mildly at the end of the spring flu season. The earlier pandemic returned in the fall, three times more deadly and contagious. It’s advertising’s job to break down your defenses and get you into the stores. If I were Republican, I’ve found weapons of mass destruction.
I’m all for thinking outside of the box, but this smacks of “pie in the sky” thinking to me. I dunno. I appreciate the article, I just don’t feel it’s gonna happen. At least not anytime soon. Sirius has too much else they have to focus on.
Brandon, I’m a little lost on how this would work. The downed pilot, how would he communicate back (their is no up-link)and are you saying the military doesn’t already have & use this technology(they have their own Sats.? The Park Services, how much band width would be needed for such a small segment of use? I’m not at all a tech. guy but what sets Sirius Xm apart from other satellite providers?
@George FM-6 is scheduled for the 4th quarter of 2010.
Food for thought for now.
Who wrote this? Buddy Lee? Good article. So many angles, Its a wonder every american doesnt own some shares of this stock. Who wouldnt?
talk about grasping for straws. If the military wants a new radio satellite they will build and launch one. To use Sirius/XM’s is just too funny
@Alex
Nuts? I thought spending $30 million dollars protecting the San Fransisco Field Mouse during the worst economic crisis of our time was nuts, but hey, we all see how fast that became reality.
Innovation is the mother of invention. Besides, exploring ideas like this could boost tourism and actually stimulate the economy.
No matter how outlandish or traditional ideas are, SIRI seems to be the only one capable of producing results across the spectrum. That’s the point.
Excellent article, Brandon!! I love Sirius!! Sirius and Apple will take over the world.
How exciting to learn that a former Sirius board member has been appointed as our country’s new Chief of Technology! How fitting!!
At the same time, I was relieved to learn of a government position that WAS NOT filled by a former Goldman Sachs executive.
Oh Lee,
I am so sorry! I just assumed that Brandon had written the article! So sorry . . . Excellent article!!
@dave
Government contracting is the way the military does business in these days. In fact, the U.S. Army Acquisition Corps’ sole purpose is this specific task. Additionally, the “military” doesn’t build anything. Civilian companies design products & then bid for contracts. Please visit the AAC’s website.
@dave
Having now educated yourself on how government contracting works, do you think the “military” would hire another civilian corporation to build, launch, & maintain a SAT system (lets say a conservative $billion dollars for this contract), or would they implement a contract to secure a bandwidth from Sirius XM, who already has SATs in space, & ready for the mission? Dave, hands down, if the government is considering anything of the sort, Sirius would win the contract.
Some nice ideas, Lee. Check your facts on Jeffery Zients, though. Mr. Zients is the Federal Chief Performance Officer and works in the the Office of Management and Budget (basically in charge of identifying wasteful government programs). Aneesh Chopra is in fact the Federal Chief Technology Officer (former Virginia Secretary of Technology).
I work supporting the acquisition of defense communications systems. All I can say is: I can tell that you don’t work in the same industry as me. The communications capabilities they have in aircraft would boggle your mind; they don’t need any help from Sirius XM.
@Sam
Work in support of? I actually conducted missions with these radios, and I know from first hand experience that there is TREMENDOUS room for improvement. Sure, there are different technologies from the modern F22 to the classic UH-1H (Huey), but none have SATRAD capabilities, and none are particularly “mind-boggling”.
Do yourself a favor, get out of your cush cubicle in the states, conduct a few missions on the modern battlefield, and then honestly tell these people you would not want SATRAD.
Oh, BTW, I also worked in the Defense Logistics Agency and worked hand-in-hand with acquisition projects. Its no big mystery.
Or how about the tour industry adopting Sirius? Most people going thru a museum opt for the headphones. Similarly, most people who want to see the sights of a city could avail themselves of a GPS controlled guide. “Turn your car into a tourbus” is how the ads would go.