Aol Internet Radio Xm

Competitive Threats to Sirius XM Radio Are Overblown

While the company does not have direct satellite radio competitors following the Sirius/XM Radio ( SIRI ) merger, there is still an active playing field competitors, Inc.luding Apple Inc. ( AAPL ) and Amazon.com ( AMZN ). One of the most talked about competition comes from free Internet based radio. Pandora Media ( P ) recently went public to great fanfare and while the stock price has plummeted sInc.e its post-IPO peak of $26, its $3 billion valuation despite 2010's meager $137.76 million of sales illustrates tremendous investor confidence in the industry and in the company. But Pandora is not alone. In the last week, Pandora's direct competitor Slacker, Inc. made some high profile headlines by partnering with AOL ( AOL ), Inc. to power AOL Radio and AARP to provide Internet radio for an underserved demographic.

FIERCE COMPETITION IS BULLISH NEWS FOR SIRIUS XM

Even on days when there is no news about Sirius XM Radio, I am reminded of the company's dominant market position. How so?

Not long ago, the financial media touted Pandora Media as the next big thing, as the dominate force in Internet radio and as a fierce competitor to Sirius XM Radio's business model. While these things may be true, to an extent, this week's headlines about Slacker point to a far different story. The truth is that Internet radio is its own competitive field and Pandora has its own fight in a unique market and that linking satellite radio with Internet radio is naive (at least based on current technologies).

More than that, the fierce competition within the Internet radio industry may weaken the actual threat to SIRI by holding down the Internet radio industry's advertising negotiating power and making potential partners reluctant to commit to either Pandora or Slacker Inc. for fear that they will team up with the eventual loser. As a result, talk about Pandora's inroads with automobile makers may be premature.

INTERNET BASED RADIO UPSIDE IS UNCERTAIN

As a consumer, I love the idea of free Internet radio, but for a shareholder, the bull investment thesis demands some caution. The user growth should be substantial going forward with secular growth in the mobile device market and overall Internet usage, but the profit trajectory is less exciting because the variable cost structure of content acquisition mitigates much of the potential economies of scale. For example, 2010 content acquisition costs were nearly 2 times the levels from 2009 while revenues in 2010 were 2.5 times the levels from 2009.

Winamp Pro v5.62 Build 3161 | Media Player

Winamp Pro v5.62 Build 3161 | 15.44 MB

Nullsoft Winamp Pro is a fast, flexible, high-fidelity media player for Windows. Winamp supports playback of many audio (MP3, OGG, AAC, WAV, MOD, XM, S3M, IT, MIDI, etc) and video types (AVI, ASF, MPEG, NSV), custom appearances called skins (supporting both classic Winamp 1.x/2.x skins and Winamp 3 freeform skins), audio visualization and audio effect plug-ins (including two industry dominating visualization plug-ins), an advanced media library, Internet radio and TV support, CD ripping, and CD burning. Winamp Player Features:

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Wireless Satellite & Broadcasting

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Parity, platforms, and protection : the future of the music industry in the digital radio revolution : hearing

Plunkett's Sports Industry Almanac 2009