Techies Rule

Like I said, techies rule the world. So why don't they have their own channel? How about getting a channel like G4 for the guys who like their gadgets? You could use the very same channel as an advertising venue to promote the latest tech toys on the market.

Interviews from some of the leaders in technology and innovators would be cool. Call in talk shows would give the geeks of the world access to some of the brightest minds. Could be a great place for girlfriends and wives to start their Christmas lists for the man in their lives. Talk about the iPhone, Android, mobile browsing, backseat TV, satellite radio, and WI-MAX. Talk about the origins of Microsoft. Talk about Google.

Rather than fight your competition, reach out to their techie base and give them something to nerd-out over. You may even be able to turn Sirius's technical concerns into competitions. It could drastically further Sirius in an open-source world.

Numa Numa? Huh?

Ok. So the Numa Numa guy isn't exactly great entertainment. It does however bring up something that Sirius does not have a lot of: regional or ethnic music.

Sirius doesn't exactly have loads of free space to go down this road yet. Perhaps further advances in data compression will allow the addition of more diverse types of music. I'm thinking Spanish, Italian, German, Russian, and Japanese music. I know we already have a few channels for Korean, Latin, Reggae, French and Canadian music. What if we had 2-3 channels for each?

Delivering that sort of diversity would further enhance the listening experience and bring in pockets of new listeners. These communities exist throughout America and would love to experience their own national content.

I could do without hearing Numa Numa on the radio, but apparently there is at least one guy in America that likes that stuff.

Sirius Rewards

Sirius has a great opportunity to use advertising to help spread its service. But, isn't satellite radio largely commercial free? The internet gives them the capability of delivering location-based, targeted advertising to consumers. Sirius could promote advertisers on the site to subscribers so they can shop at or purchase items from the advertiser and get credit towards their subscription. Let's get into this in a bit more detail.

Advertisers could put offers on the Sirius site in a special area. You could print out coupons from the site that could contribute something towards your subscription and a small discount on their product. If you visit enough of the retailers during the course of the month, you could theoretically earn your subscription.

This allows consumers to get satrad for free, so it eliminates the paid/free argument. It also would cut down on churn because consumers would view it as getting something for free just by buying one product over another: I'll buy Crest this month instead of Colgate. This allows the company to create an online advertising presence and get some of those advertising dollars they have been seeking. One other added bonus is commercial free music remains intact, while increasing advertisers.

Another approach that Sirius can take immediately is to work something out with other rewards programs, such as those offered by Citibank, in order to allow their cardholders to use reward credits in order to purchase Sirius gift cards. These gift cards could be used to purchase equipment or pay for their subscription.

If Sirius can find a simple way to help consumers buy their superior radio content, their subscriber numbers will be even more explosive than at any other point in its past. It will also bring in a windfall of cash at a time that Sirius needs to generate revenue.

Content from Sirius (chapter 1)

Sirius needs to get serious about downloadable content. The radio has the ability to get content. They have some opportunities to sell content online and make some Sirius dough. The first such opportunity is audiobooks.

Audiobooks huh? From Wikipedia (http://en.wikipedia.org/wiki/Audiobook)

An audiobook (also referred to as a book on tape) is a recording that is primarily of the spoken word as opposed to music. While it is often based on a recording of commercially available printed material, this is not always the case; nor is this required to fit the definition of an audiobook, which is why "audiobook" is one word rather than two. It was not intended to be descriptive of the word "book" but is rather a recorded spoken program in its own right and not necessarily an audio version of a book.

Spoken audio was originally primarily available in school and public libraries and to a lesser extent in music shops. It was not until the 1980's that there began a concerted effort to attract book retailers. As book publishers entered the field of spoken-word publishing, the transition to book retailers carrying audiobooks became commonplace on bookshelves rather than in separate displays. To put it simply, it is the context of a regular book read and recorded onto a means of media such as CD Roms or Cassettes, which can be an advantage to the blind or illiterate.

You could provide a number of audiobooks which could be purchased online and either downloaded or pushed to the satellite radio device. It adds another dimension to the radio. Even better, Sirius XM have Oprah working for them. Oprah has a Book Of The Month. Oprah has a large following and could even help pick a line of audiobooks every month, possibly coinciding with the books she promotes on-air.

Providing audiobooks for or partnering up with an audiobook provider can be another revenue stream for a company that is redefining radio.

Sirius Numbers

As an investor in Sirius, I took it on the chin the last day or two like many others. I'm still standing, though a bit beaten up. The main reasons for the beat down: lowered guidance for next year and debt coming due in 2009.

Let me just get it out of the way. I do not believe for a second that Sirius will only add 2M subscribers all next year. I think this number is far too conservative. I understand the OEM market isn't what it has been, but with higher penetration rates Sirius should be adding more subscribers. Not less. In my opinion, this number is conservative because it does not take into account Ala Carte subscribers. If Ala Carte subscribers count in an equal way towards our subscriber numbers, then 2M is far too low an estimate. If the 2M subscribers refers to full subscriptions only, there may be something to the number. I certainly do not think this number represents what is being portrayed in the media.

The main issue that shareholders have hanging over their heads is the debt situation. Somewhere in the range of $1B comes due in 2009 (Feb/May/Dec). While Sirius is considering refinancing the debt, I have another idea. Scrap some of the refinancing altogether and offer lifetime subscriptions.

Lifetime? But then we are losing money right? Yes and no. If you offer a limited amount of lifetime subscriptions(say 2M = 10% of current subscribers) on a first come basis, you have another avenue of raising cash to pay down bonds. Long term you would lose some money. However, you are getting money for about 5 years worth of content up front. If you managed to sell 2M lifetime subscriptions at $500 apiece, you have $1B cash on hand to pay off debt. This would improve liquidity and allow the stock price to rise again. This puts the company in a stronger position going forward. Considering that in that same 5 years you will have another 10M to 15M customers, 2M customers for financial stability isn't such a hard decision. You could even reward shareholders by offering the deal to them first.

Maybe this is not an avenue that Sirius is considering, but it is certainly a possibility to get cash quickly to pay off debt and return something to the shareholders.

Are you ready for some football?

Today, I was listening to my radio while driving and the thought of the NFL linking to Sirius crossed my mind. I think it is great that they are helping to promote Sirius subscriptions by pushing customers towards the page, but is there something more that could be done? I think the answer is yes.

What if a customer doesn't want a subscription to satrad? I know it doesn't make sense to me either. But, what if. I am sure there are those people out there that simply do not want the service. What if we sell them on listening based on the program. What I mean by this is to sell them on a football game, a concert, or even a MMA event. There are many out-of-market games that sports fans are missing out on.

This model would work best over the internet. You could sell a customer a virtual ticket to the game or event for $1 - $2 and maybe a package deal (6 events for $5). By using the ticket, the customer gains access to listen for the duration of the event.

This allows customers to get want they want for a cheap fee. It also allows them to check out the other programming options while they are listening to Sirius. It gives them a chance to check out some music during halftime. If they like what they hear, they can get the trial version or eventually sign up for a subscription. By doing this, you can promote the company's services in a different way and make some extra cash in the process.

Sirius Satcasting

With all the talk of Apple getting involved with Sirius XM in some capacity, whether it is a new device or the uSirius application for the iPhone, I got to thinking about one thing Apple has that Sirius does not: The Podcast.

All things being equal, Sirius XM has exceptional content. Sometimes you miss a program that you were looking to hear. Maybe you forgot to record it. You missed that concert or game. You were listening to Howard 100 and missed Oprah. You missed a few Mad Money episodes in your archive for when you need a good laugh. You came in late and don't want to miss anything. What do you do?

Sirius should consider the Sirius XM podcast (aka. the Satcast). Downloadable subscriber-only sports, concerts, and special programming that has occurred. This is particularly valuable with respect to sports programs. A user simply cannot record and listen to all of college football on any given Saturday.

Sirius Apple Device

The message boards and stock speculators are abuzz with the news that Sirius and Apple will each be speaking separately on the same day (9/9/08) in California. While some of the talk may be "pie in the sky", there are some good points being made about a potential partnership.

Apple and Sirius may officially announce a new application to run on the iPhone. This application is a confirmed fact as far as I have seen, but it is unknown if the application is completed or not. This would give Sirius XM a new platform to grow into. Regardless of what some may say, Sirius has the content that people want. Another source for subscribers is more than welcome.

Apple is also supposed to announce a new product of some sort. It is suspected to be a revamped iPod nano or possibly a new iTouch. With the recent talk of stale playlists and declining podcast acceptance, there seems to be another buzz: A Sirius and Apple partnership for a new portable device.

I cannot think of a better fit for each company's technologies. Sirius is moving away from designing their own radios. Apple designs devices. Sirius has fresh and exclusive content. Apple (as I mentioned before) is looking for fresh content. Sirius plays various genres and helps promote new music. Apple has new music for sale, but doesn't have the method to distribute without the user actually looking for the music.

If Apple were to take an iTouch-like device and add satrad capabilities, it would provide Sirius with a new platform to bring in new subscribers. It would allow Apple to sell new devices and further their reach into digital music distribution. Make it a device that can easily transfer to the car and it could allow Apple to beat Microsoft to the punch in automotive music sales. Sirius gets a slice of each music sale and in return facilitates the download of digital music directly into your vehicle. All you have to do is hit the "buy" button and it is yours forever. The strong content on Sirius will advertise and sell users on the music Apple is selling. And imagine what this device becomes if you also pair it up with Sirius navigation and weather services.

I know I am living in the clouds on this one, but if Apple and Sirius get together on this one, it could be mutually beneficial. It would be the "killer app" that everyone is looking for with the branding behind it to gain massive acceptance.

Gimme a heads up

I must admit that I still sometimes channel surf. I don't have to haggle with commercials, but I tend to be indecisive with my listening. If I don't feel like listening to a song, I move on to the next favorite channel. Is there a way to get me to settle down and prevent all the channel flipping?

How about a preview pane? It could give you a heads up on what song or songs are coming up next. This enhancement could help users see what they would be missing if they decided to change the channel. I would make this an option that could be disabled via the settings menu.

How about allowing a user to set up a recording wish list? What about an alert if a favorite artist is in a channel's "coming up" list? Lists could be set up by song title, artist or event type. This makes it easier for the user to record what they want without hovering over the "Love" button. This could be added to Sirius Studio.

With a few minor enhancements, satellite radio could further distinguish itself from terrestrial radio services.

Ad-supported subscriptions

It has been discussed in the past that Sirius currently has a patent for distributing advertising interlaced with live content. Commercials? But, isn't satellite radio commercial free? The answer may soon be yes and no. There are some obstacles to ad-supported radio at this time: technology and regulation.

The idea here is that existing paying subscribers will continue with service as it exists today: commercial-free. Non-paying subscribers would be subsidized with commercials. If non-paying subscribers would like to get rid of the commercials, they pay a subscription fee. Some of the content could be limited to paying subscribers only in order to give incentive to consumers becoming paid customers.

Regulation could be the tough spot in all of this. Sirius XM agreed not to use local repeaters for the transmission of advertisements, if I understand the agreement correctly. This, however, does not preclude the use of a another company for transmitting commercial content or direct satellite transmission without retransmission.

Technology would need to be developed for the radio to receive commercial content which is relevant to the current listening area. The following are a few items that need to be addressed:

1. Each radio would to know where it is. This could be done via a GPS locator. This could tell the device what radio market the user is in and determine which commercial content to store.


2. The radio needs to store commercial content. The radio could buffer up content from a secondary channel. This content can be stored inside the radio and queued to play at regular intervals.


3. Filler commercials could be added along paid commercials to advertise Sirius XM services and paid radio. "Ditch the commercials, sign up for Sirius XM radio". "Sirius XM, the future of radio". This allows the user to come back from commercials back to live content (after missing a commercial or two).


4. Commercial feature should be allowed to be disabled or periodically started on radios. This is so the feature is available on various radio stations, but Sirius XM has the ability to disable this feature on a specific channel during special events. This could be done using flags inside of an encrypted key (as discussed here).


5. Internet based services could work in a similar fashion with the radio. This will help it explode onto the cellular phone market.
   

This technology, in my opinion, is going to be a major driving force in satellite radio content for years to come. It also opens a major secondary revenue stream. If some consumers are not willing to adopt satellite radio because it is not free, give them a way to get most of the content for free. That's innovation!