...Sirius XM And the viable business model 2010 PART 1 Introduction Headquarters in New Yorok City, Sirius XM Radio, Inc. is the only provider of satellite radio, broadcasting more than 130 channels of digital audio via satellite to subscribers throughout the United States and Canada. The company's programming includes 65 channels of commercial-free music from every genre and 55 channels of news, sports, comedy, and talk radio. With impressive line ups of celebrity such as Howard Stern, Oprah Winfrey and Martha Steward there is something for everyone. Sirius's broadcasts are beamed from four in orbit satellites to more than 19.5 million subscribers who pay a monthly fee of $12.95 (Sirius). The service is mainly offered through new car sales with companies including Ford, Chrysler, and BMW among others penetrating 55% into the US market which accounts for 40% of their annual sales based on the 2009 annual report. Retailers like Wal-Mart, Best Buy and Radio Shack sell similar Sirius units for home and boat use. “Recently, Sirius has expanded to include music and comedy channels to mobile phone users; and music channels and select non-music channels over the Internet; a suite of data services; services that offer graphic information; and various real-time weather services, as well as operates a television service, which provides content designed primarily for children in the backseat of vehicles” (Sirius). These expansions are critical to the long term success of Sirius...
Words: 10644 - Pages: 43
...Sirius XM Canada MGT6910 – Policy and Strategy - Industry Bambie Hayes Shorter University Sirius XM Canada is a satellite media company and is one of the largest subscription based companies in Canada. Sirius XM Canada has 2.5 million subscribers and a 14 percent market share in the Canadian radio industry. Sirius XM Canada offers 120-130 channels that include sports, children, news, and talk programming (Sirius XM, 2015). Sirius XM Canada’s revenues were CAD 79 million for the first quarter 2015 (Q1 2015 Sirius XM, 2015). The Federal Communications Commission approved Digital Audio Radio Service’s usage for radio frequency for satellite broadcast in 1992. Two companies, Sirius Satellite Radio and XM Radio were awarded licenses to use radio frequencies. Sirius Satellite Radio and XM Radio were originally launched in limited cities, however, by 2002, both companies offered services nationwide. In the United States, satellite radio is regulated by the Federal Communications Commission. In Canada, satellite radio is regulated by the Canadian Radio and Telecommunications Commission. Canadian subsidiaries are required to have Canadian ownership (Hitt, Ireland, & Hoskisson, 2015) Satellite radio uses original equipment manufacturer, chip sets, and receivers to provide service to customers. The receivers are plug and play or factory-installed into vehicles. However, the impairment expense to upgrade outdated equipment is costly. For example, Sirius XM spent U.S. $22.3 million...
Words: 1319 - Pages: 6
...Summary: XM satellite is a newly established company that has the potential and the ability to become leading satellite radio service provider in United States. At the time of the case, the demand for high quality, ad-free and mobile radio had a great potential and XM along with Sirius received a great opportunity to enter into the untapped market. XM’s only significant competition threat was Sirius. Both Companies were trying to capture market share from one another by creating superior customer access channels and build a brand image. These could have been done through retailers and strategic partnerships with radio producers for home and car markets. The home product brands include Sony, Pioneer, Matsushita and Car audio products include Sony, Pioneer Alpine, Delphi and Visteon The major issue for XM was how to market, how to price and what will be the value proposition. Since there were only two companies in the market the pricing of the service could significantly shift the demand and estimated/desired earnings. In order to thoroughly analyze the problem and seek viable alternative solutions I will try to list some of the key marketing issues. Key marketing issues include but are not limited to: * Creating brand awareness: In my opinion it is very important to mention that potential future customers are only the ones who are aware of the brand. The creation of brand awareness would be complicated given the company’s value proposition to keep ads off the radio. ...
Words: 3953 - Pages: 16
...Analysis of Antitrust Concerns Regarding XM/Sirius Merger This memorandum sets forth an initial analysis of the competitive effects of the proposed XM/Sirius transaction and identifies consequences of the merger that appear likely to substantially lessen competition in violation of antitrust law. This analysis is based on publiclyavailable sources regarding the parties, the transaction, and the industry in general. We will continue to refine our analysis as additional facts become available and arguments are developed. I. Introduction The proposed merger of XM and Sirius will combine the only two providers of satellite digital audio radio service (“satellite DARS”). The parties claim that DOJ should not be concerned about this merger to monopoly, because there are other suppliers in the purported market for audio entertainment. Those claims will be evaluated by DOJ pursuant to the rigorous analytical framework set forth in the agencies’ Merger Guidelines1 and decades of federal court decisions interpreting Section 7 of the Clayton Act. Under that framework, there can be no doubt that the effect of the proposed transaction “may be substantially to lessen competition, or to tend to create a monopoly” in any relevant line of business.2 The parties further suggest that regulators should not be worried about their merger to monopoly because they will submit to price regulation that temporarily locks in the current rates to ensure that satellite DARS customers...
Words: 4876 - Pages: 20
...airline. Co. operates primarily on point-to-point routes with its fleet of 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft. As of Dec 31 2011, Co. served 70 destinations in 22 states, Puerto Rico, Mexico and 12 countries in the Caribbean and Latin America. Co.'s onboard offerings include inflight entertainment systems which consist of 36 channels of DirecTV®, 100 channels of XM satellite radio and movie channel offerings; and a range of snacks and beverages. Co.'s subsidiary, LiveTV, LLC, provides in-flight entertainment, voice communication and data connectivity services for commercial and general aviation aircraft) (Business Summary, 2012). The company's other businesses include LiveTV, a wholly owned subsidiary which provides in-flight entertainment, voice communication and data connectivity services for commercial and general aviation aircraft. LiveTV has contracts with seven other domestic and international commercial airlines for the sale of certain hardware and installation, programming and maintenance of its live in-seat satellite television. It also has contracts for its XM Satellite Radio Service and for certain other products and services...
Words: 309 - Pages: 2
...retail chains. Recommendations: Start off with higher radio and subscription prices because the market will take time to develop and XM should not be the bearing the brunt of the development costs. Later, lower prices on both aggressively in order to attract more subscribers and begin to introduce limited advertising. Work with auto manufacturers, offer subsidized prices, let radio manufacturers and retailers handle the home and aftermarket markets, offer subsidies. Target the male market and Hispanic/other direct, cell phone, content providers 1. What is the value proposition of XM to different consumer segments? Who should be the primary target market for XM? XM caters to the various consumer groups and better targets everything from broad groups to small niches. XM will offer better, more focused content to the consumer at a reasonable cost with ease of use and cheap to start and fewer commercials. XM should target the market that is most likely to result in paid subscriptions and to which its content is geared, look it up. 2. What aspects need to be considered in pricing the radio receiver and subscription fee? What is the optimal price for a monthly subscription? XM needs to consider the affect on the number of end subscribers based on the cost of the receiver and the subscription fee. They already did studies that give insight into which price points might be most effective, see spreadsheet. Clearly, XM will need to be sure of where the breakeven point is...
Words: 1735 - Pages: 7
... Executive Summary XM Satellite Radio was founded in 1992 as a subsidiary of American Mobile Satellite Corporation. In 1997, the FCC granted satellite radio licenses to XM Satellite Radio and Sirius. Since now XM has a license they can launch their product but they are facing a lot of questions that are to be answered to have that perfect launch. At top of that, XM Satellite Radio has not proven it value to the market players yet. XM’s biggest rival, Sirius is already far ahead of XM Satellite in term of publicity, timing and fund raising. XM Satellite Radio has a big challenge of getting customers to pay for a service that has been and still is free. Furthermore, people are unaware about Satellite Radio in general and how is it different from AM/FM radio. Moreover, the radio industry is basically in the sales decline stage of the product lifecycle and on the other hand XM Satellite Radio is in the introduction stage of product life cycle. XM is looking for ways to introduce their product to the market but the radio industry is basically trying to stay alive. Now XM needs to decide what should be done so that their launch is perfect from the day one. They have many issues to be resolved like choosing the manufacturers, choosing the target market, setting the price, getting the best retailer, choosing the right promotional tools etc. XM has great opportunities to enter and exploit the market and change the future of radio technology. For this XM need to form effective...
Words: 4586 - Pages: 19
...“Bolt.” Pixar has plans for twice-yearly films, unthinkable before the merger, and has certainly gained the expert advice from Disney when it comes to advertising, marketing plugs, and merchandising. When it comes to marketing to children, no one does it better than Disney. Even pre-merger cartoon “Cars” got the Disney treatment and remains a top seller in merchandising amongst 4 year old boys (just ask my nephew). irius/XM radio merger On July 29, 2008, satellite radio officially had one provider when Sirius Satellite Radio joined forces with rival XM Satellite Radio. The merger was officially announced over a year before, in February 2007, but the actual merger was delayed due to one tiny problem – when satellite radio first began in 1997, the FCC granted only two licenses under one condition: that either of the holders would not acquire control of the other.Oops. So Sirius and XM filed the proper paperwork with the FCC, allowed the FCC to investigate the merger, and waited patiently for the approval they needed. And although time will tell if the new Sirius XM company will succeed in the long-run, I consider this merger a success due to the number of big names recently added to their roster (Oprah, Howard Stern, Martha Stewart), as well having the foresight to combine forces in a down market. Tata/jaguar land rover the Tata...
Words: 904 - Pages: 4
...Satellite Radio Rhonda Stubblefield COM/150 June 23, 2012 Alain de la Brousse What have 22.3 million subscribers learned about satellite radio that the rest of us listening to traditional radio still haven’t yet figured out? The amazing advantages that are now giving satellite radio stations the power to change how America listens to music, sports, news, and comedy. In 2001 Fortune magazine named satellite radio as their product of the year. The magazine’s rationale for its selection stated: “of all the new technologies of 2001, XM Satellite Radio is way, way, way above the rest. It’s the first major advance in radio since FM emerged in the 1960’s, and the best thing to happen to mobile music since the dashboard CD player.” In addition, Lee Abrams, XM’s chief programmer, noted that the company hoped to have the same creative results as the FM revolution of the late ‘60’s and 70’s had. FM brought major changes to the radio scene. It delivered superior sound and had fewer commercials which pulled a large audience from AM radio. Abrams has argued that FM has now “sprouted a potbelly, gone gray at the temples, and become the stodgy establishment – complacent and vulnerable to a hard charging rival such as XM”. “Right now, we live in a very vanilla age, radio-wise,” noted Abrams. “Except for talk radio, its stay in the middle, don’t upset anybody, and play the big hits everybody’s comfortable with. We’re 180 degrees from that. We want to challenge people”. As...
Words: 1704 - Pages: 7
...1worldspace, formerly known as 'WorldSpace', is an almost but not yet completely defunct satellite radio network that in its heyday provided service to over 170,000 subscribers in eastern and southern Africa, the Middle East, and much of Asia with 96% coming from India. Timbre Media along with Saregama India plan to relaunch the company.[1] The final fate of the original Worldspace satellite radio service still remains a mystery. Despite the company's very public insolvency and the liquidation of all of its various commercial entities in 2008-2009, the company's Afristar and Asiastar satellites remain in geostationary orbit. Currently, the channels WRN 1 and WRN 2 can be received on Afristar with audio.[2] On AsiaStar, there are 2 channels broadcasting (the old Maestro channel and Sai Global Harmony which is an Indian religious channel). The precise commercial basis on which the Afristar and Asiastar satellites currently continue to be maintained in working satellite orbit by Intelsat is not known at the present time. Contents [hide] * 1 OverviHYPERLINK "#Overview"ew * 2 Content * 3 The 1worldspace System * 3.1 Space segment * 3.2 Ground segment * 3.3 User segment * 4 Controversies * 4.1 Stock value * 4.2 Debt * 4.3 Bankruptcy * 4.4 High-profile resignations * 5 Promotional information * 6 Philanthropy * 7 Historic Plans For Service Development * 8 References * 9 External links Overview[edit...
Words: 2677 - Pages: 11
...JetBlue reproduced many of SWA’s cost-reducing activities such as flying point-to-point to directly connect city pairs. It also predominantly uses one type of airplane, the Airbus A320, to lower its maintenance costs. And in addition, it flies longer distances and transports more passengers per flight per than SWA, further driving down its costs. So far, all these strategies have to do with cost-leadership. JetBlue also incorporated the differentiation strategy in their model. They executed the differentiation strategy by offering value-enhancing features include high-end 100-seat Embraer regional jets with regional jets with leather seats, individual TV screen with movies, Live TV, Fox TV, and Direct TV programming, 100 channels of XM Satellite Radio, and free in-flight Wi-Fi capabilities. By offering these unique features, JetBlue made an attempt to enhance their differentiation appeal. 2. What challenges is JetBlue facing with its chosen business strategy? What is the cause of these challenges? How should they be addressed? The challenges that JetBlue is facing not being able to create value anymore for the customers....
Words: 638 - Pages: 3
...XM’s value proposition to the market is to deliver diverse high quality digital radio content to consumers across various demographics and nationwide via a complex satellite and terrestrial network. A key advantage with XM’s satellite radio over AM/FM radio is the near-ubiquitous radio coverage that significantly strengthens broadcast signals outside the traditional broadcast area. Given the vast and high-growth car radio market and strong home segment demand, XM should target both submarkets. When pricing the radio and subscription fee XM needs to evaluate the potential demand for the product/service based on various revenue and cost assumptions, cost/benefit of advertising vs. not advertising, and the profit implications for various scenarios. Based on expected consumer response and an analysis of the above factors over a five yr. customer lifetime, we determined that XM should start offering a $100 radio with ad-free service of $10/mo. (SIRIUS price) and with-ad service of $5/mo to attract customers ($9.2 bn profit). As XM builds its customer base over time, it can raise the product/service prices to generate higher profits. By doing so XM could reach out to potential consumers who desire satellite radio but are not willing to pay the high $10/mo. ad-free fee. Furthermore, XM could differentiate itself from SIRIUS and retain customers by offering exclusive programming. The benefits of including advertisements are expected to outweigh the costs and can provide...
Words: 424 - Pages: 2
...have high average fares with a diversified geographic flight schedules that include both short and long-haul routes. 2. Principle Products or Services: low-fare, low-cost passenger airline offering, high-quality customer service. 3. Markets: in Forest Hills, New York, 56 cities in 19 states, Puerto Rico, Mexico and five countries in the Caribbean and Latin America, international flights to Montego Bay(Jamaica), Cancun(Mexico), Barbados, Saint Lucia, Kingston(Jamaica), Santa Domingo(Dominican Republic). It is well positioned in the New York metropolitan areas (which is one of the largest travel markets). 4. Compete: new aircraft, roomy leather seats with lots of leg room, 36 channel of free DirecTV, 100 channels of free XM satellite radio, free and unlimited brand, and named snacks beverage. It also provides compensation to customers who experience avoidable inconvenience (JetBlue Airway Customer Bill of Rights). And refundable fares and new payment options launched JetBlue.com in Española. JetBlue Business Card can also be used. In flight, it is equipped with an in-seat digital entertainment system. Each individual seat has a monitor with armrest remote with channel and volume controls. 5. Concerns for Survival, Growth, and Profitability: operating expenses, functional costs, airline fuel cost and consumption increased, other airlines provide Wi-Fi access and enhanced in-flight entertainment options according to customer’s interests in low price as well as...
Words: 331 - Pages: 2
...Introduction Sirius XM is the leader in satellite radio providing commercial free music, sports, and talk radio. They are two separate companies that competed for the advantage which ended a few years ago with their merger. They since have dominated the commercial free market being available in almost every new vehicle that is purchased. There are a few different other companies in the substitute market that try to compete with Sirius XM by allowing subscribers the ability to select playlists of music fitting them with their favorite genre. These other companies do not directly compete with Sirius XM, but they are putting pressure on them and stealing away subscribers. We will see how well Sirius XM has executed their current strategy by assessing...
Words: 1428 - Pages: 6
...2/27/12 Research Paper #1 Satellite Radio: Past, Present, and the Future Satellite radio, also called digital radio, is a relatively new technology to hit the audio broadcasting industry. Satellite radio is transmitted from 22,000 miles above the earth through a multitude of different satellites stationed over the United States (Bronsor, Howstuffworks.com). Through means of digital transmission the signal received and heard in satellite radio is often regarded as superior to the traditional radio experience. It emerged in 2001 with Tim McGraw being the first one to ever broadcast live on the newly developed system. It has been highly regarded as just a trend and having been invented in the wrong decade, however the major provider claims to have 20 million subscriptions to their radio programs (SEC, Form 10-K). While that is a substantial number of subscribers the technology has failed to capture the market as a whole. Its availability has been undermined by a monthly fee around 15 dollars, which has done a good job inhibiting ambitions to jump onboard this new advancement. Digital radio is a great invention however it is seen more as a prestigious service than it is as the next major form of radio for all. Two major players throughout its existence, Sirius and XM, have controlled digital radio since the beginning of its popularity. The two companies were the only two licensed for the rights by the FCC to broadcast radio by means of satellite (Hart, Washington...
Words: 1722 - Pages: 7
