Don't let losses fool you: Sirius XM has promise
Although some feel that the satellite radio service doesn't provide enough value for the subscription prices, rising sales indicate that real fans will dole out the cash.
Sirius XM has suffered through yet another losing quarter. Last week, the satellite radio company reported a net loss of $236.6 million for the first three months of the year.
Although it posted a tough first quarter, CEO Mel Karmazin expressed optimism. Sales grew to $587 million from $270.4 million a year prior, he noted. His company's operating costs dropped 23 percent year over year. And there is more evidence than ever that Sirius XM is slowly inching its way toward profitability, he said in a statement.
Not everyone is impressed. Fellow CNET Blog Network member Steve Guttenberg wrote that Sirius XM is "sticking it" to subscribers. He believes that customers aren't getting enough for what they're paying.
I understand his point. As a Sirius XM subscriber, I wasn't pleased to hear recently that it was raising prices. But that doesn't taint my evaluation of the service. For me, the "Sirius Everything plus the best of XM" package is worth $16.99 per month.
Upsides
I can't get enough of Sirius XM. Whenever I'm in the car, I listen to Howard Stern or Chris "Mad Dog" Russo. They provide a level of entertainment that easily bests terrestrial radio talk shows. Sirius XM's unique content is second to none.
I also love the service's selection. When I want to relax and listen to the spa channel, or get lost at the beach with Jimmy Buffett, I can. If I'm in the mood to laugh, I can turn on the comedy channels. And since my iPod doesn't have all the songs I really love, I can use Sirius XM to find a song for any mood.
I realize that there are alternatives to Sirius XM (more on that in a second), but I prefer satellite radio. When I drive to another state, I never need to flip through channels to find something worth listening to--a major issue I have with terrestrial radio. When I'm at home, I never need to worry about dropouts, since I can stream most of the Sirius XM content through the Web on my computer (though I should note that doing so used to be free but now costs $2.99 per month). Regardless, I'm never without that high-quality content. I'm a happy Sirius XM customer.
Downsides
As much as I enjoy Sirius XM, I realize that it has (significant) issues. There's nothing worse than driving under a bridge and losing my connection midsong. Heck, I even lose the signal when I'm sitting under some dense trees. It really annoys me.
But the main problem Sirius XM faces is competition. I can connect my iPod to my car stereo and listen to all my songs without worrying about dropouts. I can even pop a CD into my player and enjoy that. Plus, I don't need to listen to annoying disc jockeys or pay monthly subscription fees.
Although I enjoy Sirius XM's diverse musical choices, I often use free iPhone (and BlackBerry) applications like Pandoraor Slacker Radio to achieve the same effect. I can create stations containing songs from artists I like. Often, I'll find some really great songs that I forgot about. Mobile apps are a great way to enjoy Sirius-like content without the fees.
The game changer?
There's one more consideration of which we can't lose sight: Sirius XM is planning to release an iPhone app that will stream its radio content through the mobile phone. I contacted the company to get details on the app, including information on its pricing. The Sirius XM representative offered no comment.
We might not know much about the Sirius XM iPhone app, but it could be a game changer. Much like The Wall Street Journal, which charges for much of its online content but offers it free on the iPhone, Sirius XM could potentially make its iPhone app a freebie, helping it attract more listeners and sell more advertising.
The mobile app could also eliminate the single issue we all have with Sirius XM: the dropouts, which I already mentioned. If the company's content is being streamed over a Wi-Fi or 3G cellular connection to your iPhone, you'll never need to worry about satellites. It's just like streaming Sirius XM through your browser.
Time will tell how Sirius XM's iPhone app will change the company's business.
The bottom line
Sirius XM isn't perfect. And there are some (like Guttenberg) who don't think the service matches the price. I disagree. I'll admit that the company faces some serious issues that make it more costly and less convenient than a variety of competitors, including terrestrial radio, mobile music apps, and even CDs. But with musical content for any taste, entertaining talk shows, most major sports games, and the possibility of a streaming mobile app, I think that Sirius XM has a lot of promise.
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