This Week in Sirius XM Radio


Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio moved nicely higher this week, gaining 2.3% to hit $3.58. The media darling's rise contrasts the negative week for the markets in general, as the Dow and Nasdaq closed out the week lower.

There was more going on beyond the share-price gyrations, though, even as Sirius XM wrapped up the week at its highest close in more than five years. Pandora posted a well-received quarterly report, and before that it announced a sponsored channel and deeper integration with Facebook . There were also reports that Apple is hitting snags with publishers to roll out its competing streaming service.

Let's take a closer look.

Higher ground
After hitting five-year intraday highs in each of the three previous weeks, Sirius XM failed to top the prior week's $3.59 mark. However, it may have done something even better by closing Friday at $3.58. That's the highest the shares have closed out a trading day since early 2008.

Pandora thinks outside of the box
Pandora saw its shares hit a new 52-week high after posting encouraging quarterly results. Adjusted revenue for the leading music-streaming service rose 58% to $128.5 million, well ahead of the $123.8 million Wall Street was expecting.

Pandora's loss matched Wall Street's target of $0.10 a share, but there were plenty of other impressive tidbits in the report. For starters, subscription revenue more than doubled, as Pandora now has more than 2.5 million premium Pandora One subscribers. Yes, more than 96% of Pandora's 70 million active monthly listeners continue to stick only to the free service, but things are moving in the right direction.

Pandora also scored some interesting deals earlier in the week. First, it introduced Pandora Premieres, a new streaming channel that will feature notable upcoming music releases. This is pretty potent, as labels will give access to Pandora to music that won't be available through other outlets.

In a smart twist, Pandora has a sponsor for this channel. T-Mobile -- the country's fourth largest wireless carrier -- is paying for branding rights and exposure. Pandora has struggled with profitability with its conventional online advertising model, but if it's able to land channel sponsorships as incremental revenue at the same time it's gaining ground as a premium service, the bears will be silenced.

Pandora also announced more seamless sharing on Facebook. Pandora users have been able to share the music they're listening to through Facebook Music posts on the world's leading social-networking website, but a new update makes sharing automatic for those who want to let their friends know what they're streaming these days.

Spotify also cashed in by announcing that it will begin publishing a list of its 50 most streamed and shared songs as an embedded link for anyone to broadcast. Those checking out the list will be able to stream any of the tracks without even having to sign up for Spotify. Watch your back, Billboard.

It will be interesting to see whether Sirius XM's MySXM follows any of these moves to give its online platform the viral kick it lacks relative to the competition.

Apple needs to win the publishers' clearinghouse sweepstakes
We're still waiting for Apple to make its inevitable plunge into streaming. Sources tell The Verge that now it's music publishers that are holding up the rollout of iRadio. Negotiating licensing deals with the record labels is hard enough, but now Apple is getting some resistance in securing the publishing royalties that go out to the songwriters and composers.

Reports earlier this month suggested that another thing holding back the service is track skipping, or the right to pass by a song if it's one the listener doesn't like. Lack of skipping is part of the limits Pandora puts on its free users, and it leads one to believe that iRadio will be more like Pandora or MySXM and less like the Spotify clone that All Access will be.

Apple had better hurry up and get those swim trunks on. The pool's getting crowded.

A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.

Even though Sirius XM is one of the market's biggest winners since bottoming out four years ago, there's still some healthy upside to be had if things go right for it -- and plenty of room for it to fall if things don't. Read all about Sirius in The Motley Fool's premium report. To get started, just click here now.

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Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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