Is Sirius XM the Next Netflix?
Sirius XM and Netflix have a few things in common. They are both profitable broadcasters of third-party entertainment. They each lead their respective niches, with tens of millions of paying subscribers apiece.
However, they may also be alike in another way if Sirius XM expands its platform overseas in a few years.
Sirius XM's satellite radio business and Netflix's original disc-based rental service have their geographical limitations. Sirius XM's satellite fleet only goes as far as North America, just as Netflix would've had to build out a network of distribution centers across the world if it wanted to duplicate its model overseas. The Internet made Netflix's overseas push possible, allowing it to merely strike the content licensing deals and stream away. Could Sirius XM be about to do the same thing?
Sirius XM is no stranger to cyberspace. It's been streaming its channels online since shortly after the introduction of satellite radio. Sirius XM has been beefing up its Web-based offerings in recent years, improving on the receiver-beamed channels by offering a broader array of digital channels and introducing on-demand and music-discovery options.
This has naturally opened the door to a potential rollout of its platform in overseas markets that are outside of its satellite range, but there's been little to give investors a reason to believe that an international launch is coming anytime soon.
Well, that may change on Friday. Howard Stern's birthday bash -- the star-studded affair that will honor satellite radio's biggest star -- will be made available for free to non-subscribers as a stream through SiriusXM.com.
Yes, it will be available to all non-subscribers, including anyone outside of North America. Netflix will "invite the world," according to last week's press release, making this an interesting way to try to introduce its brand to geographical markets where it has not been previously accessible.
Obviously, this doesn't mean that Sirius XM is about to introduce its platform or a culturally tweaked variation internationally. However, it would seem strange if Sirius XM and Stern are emphasizing the global availability of this prolific event only to shut the world off after it's done.
It won't be easy to compete in a competitive market for streaming overseas with a premium platform. Sirius XM's own Web-based platform is not nearly as popular as its satellite-based service. However, Netflix also faced some long odds when it expanded from Canada to Latin America to parts of Europe. It was the right call for Netflix, and it will be the right call for Sirius XM.
You can profit from the changing face of entertainment
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.
The article Is Sirius XM the Next Netflix? originally appeared on Fool.com.
Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. It also owns shares of Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.