Sirius XM Radio (SIRI) CEO Mel Karmazin faces a sobering array of challenges. The economy is in the tank, car sales are plunging, and consumers have more ways to listen to music by the day.
But take heart! Wharton professor Peter Fader has the answer. All Mel has to do is ditch both the Sirius and XM brands and remarket his company as a “music and entertainment service”:
Come up with a proposition that can compete with the iPod […] I’m calling for a marketing makeover. Dump both names because both are tightly linked to satellite radio. The company should be saying, ‘Here’s a music and entertainment service that’s available on every platform every place. And it’s commercial free.
OK, maybe. But we’d like a few more specifics.
Citigroup analyst Tony Wible suggested that one way SIRI could end its reliance on car sales is by collaborating with Apple and streaming content to iPhones and iPods using a special application already rumoured to be in the development stage. This would be welcome, but what kind of premium would Apple be willing to pay? Other than Howard Stern, is there that much that a “Sirius Application” could do for iPod users that they can’t already achieve by using the “shuffle” function?
SIRI might be better off designing its own portable player that it could sell for cheap, and then making its money on subscription fees.
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