Death Watch for Sirius?

If you made money on Sirius stock please raise your hand..anyone? Anyone? Oh, just you Howard Stern? Mazal tov, cause you’re the only lucky bastard to win with this pig of a stock. And I thought Mel Karmazin knew what he was doing. For those of you not in the know, this stock is trading under a buck and faces de-listing if it doesn’t get its act together soon.

What I don’t get is how???

Tell me, with the following going for it, how did this company not execute better:

• 1. Limited competition
• 2. Fantastic talent
• 3. Great management (Mel, you out there?)
• 4. Captured audience
• 5. No commercials
• 6. Wider audience reach via long tail programming
• 7. Built in sales via auto manufacturers

Trouble is, something happened on the way to the fair and I am not sure what. I stopped watching this stock when it hit $3.50 and the only people selling were those who got grants. Everybody else, their stock fell out of bed and they didn’t know what hit them.

Sirius Deconstructed

I spent many years working for the man in the telecom industry and one of our favorite moves was to subsidize equipment. In other words, if you signed on for a year of wireless service, I would give you this phone at a significant discount. If you sign up for two years, I would give you even more of a discount. Then I owned you.

For the next two years you paid your bill like all the other lemmings and you were happy to do it. Here lies the problem with Sirius. Sirius should have put their equipment out there for free if they had to in order to get subscribers. Subsidize the crap out of the hardware and own the residual revenue. It’s the “give them the razor, sell them the blade” philosophy executed to perfection.

But Nooooooooooooo

You had to make money on the equipment which lowered your subscriber base. Then you came out with all kinds of piece of crap portable players instead of heading over to Cupertino and getting in bed with iTunes, only the single largest (legal) distribution music network ever. I mean, why wouldn’t you guys sell a monthly download subscription on iTunes? It’s a no brainer.

To make matters worse, it’s almost time to renew some of the high priced shows you bought into to steal market share away from XM, now you own that mess too. All the while people are plugging their iPods into their cars and listening to books from Audible, DRM-free music from Amazon, and podcasts from everywhere else.

But you know what’s funny? I thought for a long time that the fastest extinction in a technology life cycle was the fax machine…now I’m not so sure.