Sirius XM's Dual Concerns: Debt, Delisting

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Disgruntled Users

A greater variety of personalized options may help calm longtime XM subscribers who have grown frustrated in recent months as Sirius consolidated some of its programming and some beloved shows went away. On fan site XMFan.com there are more than 13 pages of comments from people considering canceling the service after losing favorite channels. On his blog, writer Joe Nick Patoski mourns the demise of XM's X Country and Disorder channels—"two changes…[that] have me pondering cancellation."

Word of disgruntled existing users may keep new subscribers from signing up. "That kind of move has a ripple effect beyond the existing subscriber base," says Kevorkian. "It lends bad publicity for the service."

By starting to distribute its content differently, for instance via the iPhone, Sirius may be able to offer what some of its rivals already offer, and allow users to pay to listen to specific interviews or a particular concert. It may even allow subscribers to purchase song tracks and audio books from its Web site or through its radio receivers. "If they are going to remain tied to a pure subscription model, they are probably not going to succeed in the long run," Engel says. After all, rivals like Web radio, HD radio, and music services like Apple's (AAPL) iTunes are making inroads. Automakers like Ford (F) are building more support for Apple iPod music players into their cars. According to IDC's fall survey of nearly 2,000 people, 58% of Americans own portable media players, while only 16.5% subscribe to satellite radio service.

Many of those customers are die-hards. To keep their favorite satellite radio service operating, many of the members of Hartleib's group "will donate $10,000, $1,000 to Sirius," Hartleib says. "We can raise the money." But the company will need more than the donations of a handful of devoted investors to appease creditors.

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Sirius XM
Satellite Networks
Consumer Marketing

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.