This Week in Sirius XM Radio

This Week in Sirius XM Radio

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio moved higher after three straight weeks of declines -- before giving it all back on Friday to close unchanged at $3.52. The media darling's flat showing was beaten by Nasdaq's 1.3% surge on the week.

There was more going on beyond the share-price gyrations, though. Short interest on Sirius XM inched lower. Fans are bracing for a monthly rate increase. And on the streaming front, a Wall Street Journal article looked at the promise of streaming as a revenue maker for the recording industry.

Let's take a closer look.

Short people
Exchanges posted their short interest data for mid-December on Tuesday. The number of shares of Sirius XM sold short dipped from 302.9 million at the end of November to 280 million.

That's historically low for Sirius XM. Outside of a brief spell a little over a month ago, when the number of bearish bets fell to nearly 270 million, this is the lowest level of naysayer activity of the year. Sirius XM has done its part to clear out the bears by posting solid results and encouraging subscriber metrics through 2013.

Don't call it a hike
Sirius XM turned heads in October when it revealed that it will increase its monthly rates in January. It's only the second time that Sirius XM has boosted its subscription price higher since the merger of the two satellite-radio providers.

This isn't on the same scale as the 12% increase it pushed through two years earlier. Going from $14.49 to $14.99 a month is only a 3.5% bump. It's modest compared with the increases that cable and satellite TV providers have rolled out on a seemingly annual basis, but it's not as if Sirius XM's programming costs are spiraling out of control. Sirius XM has a lot of control in containing how much it spends on content.

It will be interesting to see how this plays out, but it's worth noting that subscribers didn't flinch during the first price increase.

Streaming along
There's been plenty of bellyaching at Pandora and other streaming sites about the fractional pennies they're shelling out whenever a song is played, but there may be more money being made here than the skeptics think.

A Wall Street Journalarticle looked at the dynamics behind the growing number of cloud-based services offering tunes, with surprising results. The Journal reviewed data that showed a major record label is making more money per customer, on average, from streaming services than from folks who purchase CDs or downloads. The data finds that the label is making $16 a year from premium subscription customers, as opposed to an average of just $14 from actual purchases.

Those fractions of pennies add up. It may not seem that way right away, but some artists are finding that they generate more streaming royalties than purchase revenue.

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Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Pandora Media and owns shares of Sirius XM Radio. 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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