With the introduction of the Sirius XM application for the Apple iPhone, Sirius XM has positioned themselves into a large secondary market for their programming. As the former adversaries merge into one media behemoth, they have made it clear that they will eventually have different tiers of service for their satellite customers. With this new appication, Sirius has a huge opportunity to push the internet subscriber model in a way that has yet to be seen: Ala Carte.
Currently, a subscriber signs up for Sirius or XM and then needs to add another $3/month fee on top of the original subscription in order to get premium internet radio. Premium internet radio is a prerequisite for the iPhone application. $16/month may be a steep price for some people to accept paying for something they have always thought of as free. New consumers may be somewhat slow to pay $16/month to get radio on their phone. It may be a superior radio experience, but it is still a new bill. Sirius XM can break this mindset with Ala Carte.
iPhone users have been giving the trial a chance and downloading the application at a high rate. With a subscription, you end up getting about 120 channels of music, talk (celebrity, sports, political, men/women, gay, financial, religious, medical), news (global and national), concerts, comedy, celebrity music channels, and more. There is truly something for everyone. Stern fans were left out in the cold at the application launch, but this will be cleared up, I'm sure. What do I do if I only want a handful of channels on the internet stream and I do not have a subscription?
Apple's new iPhone 3.0 operating system allows for in-application subscriptions. If you tie an individual subscription with each of 120 channels, you can offer a monthly subscription on different package levels. Care would need to be taken not to cannibalize your existing subscriptions, but with 30 million+ iPhones and iTouchs sold, there is a huge untapped market. If the offerings are smaller and less costly, it is easier to sell consumers on smaller packages. Get them in the door and upsell them on the channels. To add this feature to the Sirius XM application would only require an application upgrade. No new hardware. No new radio to install.
iTunes users are used to buying one song for $1. Think of all the entertainment that one dollar can now get. You could get subscriptions like this:
$0.00/month Free showcase channels (with advertising)
$1.00/month per standard station
$2.00/month per premium station (Stern, Oprah, O&A)
$3.00/month pick 20 standard channels
$3.00/month politics and business talk
$5.00/month sports package (MLB, NFL, NCAA, NASCAR)
$5.00/month pick 40 standard channels
$10.00/month All Sirius XM standard channels + sports
$13.00/month All channels (standard and premium)
By allowing users to get the channels they want at lower price points, you make the product easier to accept for younger users or those on a budget. If you give users the ability to subscribe for only one month or on a recurring basis, it becomes easier to sample one channel for a month without a significant cost to the consumer.
10.12.2008
Free Preview Week
Sirius has a great product with exclusive content. If a consumer is not exposed to the content, they generally do not know what they are missing. There are also a large number of former subscribers that let their subscriptions lapse. Similar to cable TV, give them a free-preview week or weekend to see what they are missing.
Former listeners can get a taste of Stern, NFL, NHL, College Football, MLB, NASCAR, Oprah, Eminem, Martha Stewart, or the numerous radio channels. With all of the content, you are bound to get some listeners to come back on board. Offer them a 25% discount to re-sign with the company. It does not cost the company anything more, since the customer already has the radio.
This also gives you the opportunity to promote the Best of Sirius and Best of XM packages. Existing subscribers can give these new channels a test run before subscribing. It helps to promote the new services a bit more than telling people to sign up for them. This is important because many Sirius subscribers have never been XM subscribers and vice verse.
This same approach can also be used for Ala-Carte subscribers. If you allow them to preview the channels that they are not receiving, there is a good chance that they will add a few. They may even add some premium packages. Even if they only add a channel or two, it still adds to the bottom line.
Free previews certainly help the company to promote the product to those that no longer listen and to those that may not have been fully exposed to the complete Sirius XM experience. If you do this 4 times a year, you could add new money to each financial quarter.
Former listeners can get a taste of Stern, NFL, NHL, College Football, MLB, NASCAR, Oprah, Eminem, Martha Stewart, or the numerous radio channels. With all of the content, you are bound to get some listeners to come back on board. Offer them a 25% discount to re-sign with the company. It does not cost the company anything more, since the customer already has the radio.
This also gives you the opportunity to promote the Best of Sirius and Best of XM packages. Existing subscribers can give these new channels a test run before subscribing. It helps to promote the new services a bit more than telling people to sign up for them. This is important because many Sirius subscribers have never been XM subscribers and vice verse.
This same approach can also be used for Ala-Carte subscribers. If you allow them to preview the channels that they are not receiving, there is a good chance that they will add a few. They may even add some premium packages. Even if they only add a channel or two, it still adds to the bottom line.
Free previews certainly help the company to promote the product to those that no longer listen and to those that may not have been fully exposed to the complete Sirius XM experience. If you do this 4 times a year, you could add new money to each financial quarter.
10.11.2008
Brand Recognition
As the number of manufacturers including Sirius XM in their products increase, Sirius needs a way to let consumers know that their product is involved. Consumers looking for the product will appreciate the ease by which they can quickly identify that Sirius is paired with this device.
Think of this as the "Intel Inside" advertising model. I can look at my laptop and tell that it has an Intel chip and MS Vista. When shopping for it, I didn't have to look too hard to determine which computer I wanted. Sirius can include a logo decal for each device that contains Sirius. When you look at the product, you can determine within seconds that it either does or does not have Sirius.
For larger ticket items, like cars, trucks, or SUVs (I know, but gas prices are coming down), you could put a decal on the window if it is a standard feature. This helps a car buyer identify a feature on the car. Anything that can sell a car is a plus in this tough market. Commercials could show a little icon in the corner.
Product branding is important, especially when other manufacturers are creating their own devices. Anything that helps the consumer buy Sirius can make the sale much easier. You wouldn't want the consumer to get confused and accidentally buy some crappy HD Radio.
Think of this as the "Intel Inside" advertising model. I can look at my laptop and tell that it has an Intel chip and MS Vista. When shopping for it, I didn't have to look too hard to determine which computer I wanted. Sirius can include a logo decal for each device that contains Sirius. When you look at the product, you can determine within seconds that it either does or does not have Sirius.
For larger ticket items, like cars, trucks, or SUVs (I know, but gas prices are coming down), you could put a decal on the window if it is a standard feature. This helps a car buyer identify a feature on the car. Anything that can sell a car is a plus in this tough market. Commercials could show a little icon in the corner.
Product branding is important, especially when other manufacturers are creating their own devices. Anything that helps the consumer buy Sirius can make the sale much easier. You wouldn't want the consumer to get confused and accidentally buy some crappy HD Radio.
Thanks for the idea Frank!!