Sirius XM Teetering on the Brink of Irrelevancy
Bezos pulls off more than good branding, excellent imaging or a sneaky marketing ploy. Instead, he has built what is now a wholly entrenched innovative and progressive start-up culture at Amazon.com.
I talk to people almost daily who tell me that the culture Karmazin has created at Sirius XM exudes the terrestrial radio atmosphere that inspired satellite radio. Mel might as well be running a cluster of New York City AM/FMs because that's, effectively, what Sirius XM is.
Grab a free trial. They offer one. If you're under 50, odds are it just won't make the connection. If you're familiar with traditional radio, you'll feel as if you're listening to it or something worse. Simply put, the product does not translate to something that sounds even remotely hip and relevant, be it Google TV or mobile devices such as smartphones and tablets.
Sirius XM and its supporters tell us that they're everywhere Pandora(P) and other younger-skewing companies are. They have an app. It's on smartphones. It's on tablets. Now, it's on Google TV.
Terrestrial radio is there as well. That's an industry that generates $14 billion in advertising revenue every year -- but find me a major, pure-play radio company worth investing in. You can't do it. Their stocks suck as well. But why? For the same reason that Sirius XM's stock sucks.
You cannot slap lipstick on a tired, stale and soulless product. You cannot imitate what pioneers such as Pandora do and expect people, particularly young people, to adopt, let alone pay for what amounts to a cheap imitation.
To survive over the long haul in the space Sirius XM competes in, you need a start-up culture. You need the foresight (and the guts) to sacrifice the near-term to ensure you seize at least a share of new media's long-term opportunity.
That's where terrestrial radio failed. It stuck to its model. It expected continued success by habitual default. It refused to change. It refused to shake up its establishment and hire new, young blood.
Today, you will not find an argument when you speak of terrestrial radio as an increasingly irrelevant artifact of history, even though it can claim a multi-billion dollar business. It can only stay alive by becoming something other than what it is.
SIRI loyalist longs cannot see the writing on the wall. Mel Karmazin refuses to look in the mirror. He will not give up control. It's a recipe for irrelevancy, if not unmitigated disaster. Only Liberty Media or a team of psychiatrists working round the clock can save them.