This Week in Sirius XM Radio
Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio rode higher with the market in general, soaring 1.6% to close at $3.81. The media darling's pop was in line with the Nasdaq's equally impressive 1.7% gain on the week, as the company's shares hit a five-year high.
There was more going on beyond the share-price gyrations, though. Pandora announced its new CEO -- and it wasn't Mel Karmazin. There were more legal tangles for Sirius XM related to music royalty payments. And Microsoft and Apple also made waves on the streaming front.
Let's take a closer look.
Keep on moving
Sirius XM traded as high as $3.88 on Wednesday and Thursday, establishing a new five-year high. The last time the satellite-radio operator was being exchanged at these levels was back in May 2008, when the stock hit $3.89. If Sirius XM manages to take out that level we would be back to 2007.
It's not a surprise to see the satellite-radio star hitting new highs. It's on top of the world in terms of subscribers, revenue, profitability, and cash flow. Auto sales were stellar last month, fueling the stage for healthy subscriber growth in the coming months.
The only fundamental setback is that the legal fisticuffs continue pertaining to whether Sirius XM should be paying music royalties for songs recorded before 1972. That was when federal copyright protection kicked in on sound recordings. Several record labels and music organizations joined the fight this week.
The potential damages won't necessarily break the bank at Sirius XM. The real harm here is the potential hit to Sirius XM's reputation for fans of oldies who thought their premium subscriptions and royalty fees were benefiting the artists they were listening to directly.
There's a new CEO in town
The leading Internet radio provider finally ended its months-long CEO search, naming former aQuantive CEO Brian McAndrews as its new helmsman.
There had been plenty of speculation earlier this year that former Sirius XM Mel Karmazin would be up for the challenge, but Pandora made the right call. It didn't need an old-school radio guy. It doesn't need programming. Techies handle that, so to speak.
Pandora's challenge is milking more revenue out of online advertisers, and that's where McAndrews -- who grew aQuantive to the point where Microsoft acquired in a $6.6 billion deal -- is the right choice.
Everyone's making waves
Microsoft kicked off the week by announcing that it will make Xbox Music available for iOS and Android devices. It had rolled out last its streaming platform late last year exclusively for PCs and other Microsoft products.
A day later, Clear Channel announced that it will beef up its iHeartRadio Talk app with more talk programming. That bears watching. One of Sirius XM's advantages over most of the streaming options is that they rely primarily on music. However, Clear Channel has connections with talk radio, and it's making them easier to stream on the go and in connected cars.
Then Apple stepped up with its iPhone event. We've known for months that iTunes Radio -- the consumer tech behemoth's push into Pandora's market -- was coming. On Tuesday we finally got a date. The new service will roll out on Sept. 18 as part of the iOS 7 update that Apple will push out to its more recent products.
Yes, that's this coming Wednesday. The streaming space that Sirius XM has been trying to be a bigger part of with its improving online platform is starting to get pretty crowded with some big names.
A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.
The article This Week in Sirius XM Radio originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Pandora Media and owns shares of Apple and Microsoft. 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.