However, Frear feels that his company has an advantage in being able to serve dozens of channels of programmed content that won’t tax the bandwidth constraints and reach on the open road. This is an argument that may fade in time as connectivity grows faster and more reliable, but let’s not end the discussion of connected cars by merely pointing out Sirius XM’s advantages of satellite-served content and its built-in audience of nearly 24 million subscribers.
The Internet will threaten Sirius XM Radio Inc (NASDAQ:SIRI), but it will also be the same tool that makes Sirius XM better.
Frear didn’t venture out this far on Tuesday, but let’s talk about the merits of connectivity for Sirius XM’s model.
Won’t advertisers be willing to pay more to reach users that are a push of a button away from receiving more product information?
Isn’t there more money to be made in selling song downloads or products that show guests are pitching if touching a screen or pushing a button can set that transaction in motion?
We live in interactive times. Won’t satellite radio become more engaging if listeners can be polled on topic issues or the song to play next?
Sure, the connected car will make things more competitive for Sirius XM. However, it will also give the media giant ways to make its service stickier and generate more revenue per subscriber.
Don’t fear the connected car. Just be glad that Sirius XM Radio Inc (NASDAQ:SIRI) is on top of the disruption process.
The article Sirius XM Isn’t Afraid of the Connected Car originally appeared on Fool.com and is written by Rick Munarriz, Munarriz.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends General Motors.
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