Wednesday, March 11, 2009

55.8% of Sirius XM Radios Dark!

While reading this article in the Wall Street Journal today, I was struck by the fact that after the free trial for their pre-installed Sirius XM radio expired only 44.2% actually continued to subscribe.

As someone who recently elected to cancel my XM radio subscription, I was amazed but not surprised by this figure. I had long been skeptical of the value proposition of this service. When I did purchase a new car last year with XM, I did give it a listen and found little to hold my interest. As a lark, I did subscribe for a full year to give it a bit more time. I did find one channel, Fine Tuning, that piqued my interest. Unfortunately, when the great merger of XM and Sirius finally was culminated things changed for the worse. XM Radio customers clearly got the short end of the stick. My main area of music interests centers around Progressive, Jazz, Modern Classical, Celtic, Folk, and a host of other categories. With the elimination of Fine Tuning and Beyond Jazz as well, the value of XM really went off a cliff for me. Thus, I decided not to renew this month when my subscription expired.

Given Sirius XM's well documented revenue/debt problems, I am surprised at how unimaginative their business model is. There is still no iPhone app, despite there being dozens of internet radio apps already available for the iPhone. Their own internet radio stream has been a poor step child and poorly marketed. And now they are raising the price to compete better with all the free streams available (irony intended)!

Back to the 55.8% dark issue. I would suggest that Sirius XM implement a free commercial sponsored service of say 5 to 10 channels that featured a cross section of the full service and allow all currently dark radios to listen for free (albeit with commercial interruptions). It seems ludicrous to be so stubborn to have nearly 60% of your potential user base deaf to your service. With this service, I would suspect they would attract large advertisers and could generate a sizeable revenue stream. In effect, they could claim a 100% listener base rather than the almost 60% absent listeners they now have. I would think setting up such a service would add little expense to their existing operation. I have not seen such an idea suggested before and would strongly urge Sirius XM to consider it.

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