I see no reason to gloat over Sirius' problems. If retail sales are slow for Sirius, you can be sure that they are slow for XM as well. This is a blow to the entire industry.
I haven't gloated (when I gloat, you'll know it).
But, THIS shouldn't be a blow to XM. XM has taken its blows as they came, and has been totally up front about the sluggish retail situation for months. THIS is a blow to Sirius.
Make no mistake, XM is less reliant on retail going forward than Sirius is.
With respect to the automakers, I think that is not at all clear right now that Toyota is going to factory install XM in a significant amount of their autos (like at least 40%).
There is still a great deal of confusion about Toyota, owing largely to an intent on SIRI's part to mislead.
While I agree we don't know to what extent Toyota will install satellite radio, we do know that they won't be installing Sirius and we do know that Nissan will be factory installing XM in an very large portion of their US production. Perhaps it turns out that Toyota won't increase penetration substantially, but given that their primary competition is doing so, it seems very likely.
Right now on their web site and on Edmunds they are offering as options both XM and Sirius equally at the same price.
Toyota has been dealer installing EITHER service to date, and factory installing NEITHER. However, some Lexus models are beginning to appear with XM factory installed and standard equipment. It is my understanding that Toyota has said you can get dealer-installed Sirius in some of these vehicles, but you (a) have to pay for the XM unit anyway (plus the Sirius unit), and (b) you give up the additional data services features XM provides.
It is important to note these decisions are made years ahead of when this stuff starts showing up in vehicles. Toyota does not allow you to just stick any old piece of hardware in one of their vehicles. And they don't make these decisions willy-nilly. And XM has made it clear that Toyota doesn't allow the tail to wag the dog.
As XM's relationship with Toyota has evolved, I've become more convinced that Sirius did permanent or at least very long-term damage to any potential relationship with Toyota when they released the Bogus Midnight PR alleging a relationship that didn't exist. XM has been very clear that Toyota doesn't appreciate or tolerate that kind of behavior and I believe them.
The retail situation presents a bigger problem for Sirius than for XM because Sirius has counted on massive content expenditures to bring in subscribers. Clearly, it isn't working. While some people were claiming "content is king" and that big content expenditures would solve all problems, it clearly has not come to pass, this year at least.
I believe XM has the better content today by a wide margin and a margin that is getting wider. But at this point, content is not king. OEM deals are still king. |
