By Richard Menta 7/7/09
The power of the iTunes App store is evident and this has led to a landrush not only for new applications for the store, but to build similar environments to serve the likes of Google and Research in Motion. Two weeks ago Sirius XM released an application that will allow users to tap into their satellite radio programming from their iPhone and iPod touch units. The results so far are quite encouraging with the Sirius App topping the iTunes charts. The question is this; will this success be big enough to extend the Sirius XM business model?
Several years back there was talk of an iPod satellite, which at the time required a hardware solution to mate iPod and content. As I wrote back in December of 2004 the idea had considerable appeal from a business standpoint. Unfortunately, Apple was not willing to commit to merging satellite technology into any of their iPod's.
Fast forward five years and the iTunes App store brings with it a pure software solution, one that utilizes wireless connections rather than satellite links to connect users. The end result, according to the press release Sirius XM just sent me, is that in two weeks over one million people have downloaded the Sirius XM application. Reaching more than 1 million downloads so quickly is a strong testament to our world-class programming and SIRIUS XMs instant brand recognition, said Scott Greenstein, President and Chief Content Officer of SIRIUS XM Radio.
The real question to be asked - and the one that is most important to the company, which is struggling financially - is how many of those who downloaded the application are brand new Sirius XM users and of that number what percentage became steady $12.95 a month customers.
Chances are the great majority of these users are part of the existing customer base who only have to shell out an additional 2.95 a month for online service. With 18.6 million Sirius XM users at present a million downloads offer a reasonably decent chunk of the existing audience to grab another three bucks off of.
But, if Sirius can draw enough first time users willing to pay a double-digit figure for iPhone/iPod service then the power of the iTunes App store is affirmed. This is the bigger story here, one that could help pull Sirius XM's stock up from the sub $1 trading point where it has languished for many months. I am already in contact with the Sirius folk and asked them to provide those numbers if and when they become available. In the meantime MP3 Newswire is doing a review of the service itself.