I just wrote an enthusiastic post on Sirius XM’s new iPhone app.  However, a few things have emerged since I posted.

First of all, the Sirius XM app will not provide access to Howard Stern’s two channels, or MLB/NFL play-by-play.  My guess is that Howard is blocked due to explicit content by Apple, and there is some licensing issue that prevents play-by-play sports on the iPhone.

But in any case, the exclusion of these channels makes the Sirius XM app nearly useless to me.

Not only that, but Sirius is actually charging $3 a month for iPhone access.  This is confusing to me, because iPhone users are not using the company’s satellites and are in a way trying to compensate for the poor reliability of satellite signals.  So what charge users more?

In any case, I think the Sirus XM app has just shifted from a big boon for the company to an enormous flop.  Oh well.

Yesterday Sirius XM finally released their iPhone App.  And it’s about time.

I’ve mentioned this before, but I think the iPhone will be a huge driver for Sirius XM.  Unlike satellite receivers that cut out in tunnels or in the city, or have to be carefully placed near a window, the iPhone uses a cell signal to connect to 120 channels of Sirius XM.

That gives you access wherever you have a cell signal – even in buildings, in the gym, etc.  I think that changes the value proposition of Sirius entirely.

For $14 a month you get access to all Sirius channels, including Stern and sports channels.  Sure, there are free streamers like Pandora out there, but Pandora doesn’t have radio stations – they have music.  Sirius has actual shows with hosts, including Stern, among many others.

There is a 7 day free trial so you can test this out before you subscribe.  The app itself is free, but it requires a Sirius XM subscription.

For you Stern fans out there with iPhones you’re gonna love this…Mallard Software today released a Sirius client for the iPhone, called uSirius.

It works with any iPhone or iPod Touch that has been jailbroken.  All you need to do is add the following source to your installer:  http://www.millardsoftware.com/files/downloads/usirius/iphone/iphone.xml  and install uSirius.

How does it work?  Well, Sirius streams over the internet, so as far as I can tell this app just taps into this feed.  You’ll need a valid Sirius user ID and password - or you can go to the Sirius website and get a 3 day trial.

The best thing is uSirius works over wifi OR EDGE, so you can get Sirius anywhere you iPhone can get EDGE data…and that’s pretty much every populated area in the US.  I’ll imagine this will be even better when the 3G iPhone comes out.

I’ve been listening now for a few minutes and it works well.  The sound is fine, and surprisingly there haven’t been any sound dropouts.

The only issue I have is that when you’re on EDGE you’re eating up battery power like a mother.  I’d use wifi whenever available.

Some websites have said that you need to pay to use uSirius after an introductory period, but I haven’t seen anything about this when using the app.  We’ll see in a few days.

It’s also important to note that uSirius is a beta, meaning lots of crashes.  I haven’t had a crash so far, but some websites have reported crashes when moving from wifi to EDGE.

Still, this is some good shit.  Check it out.

Mark your calendars gents, the Hack pack aka Killers of Comedy are making an appearance at the Great America Music Hall in San Francisco.  At $25 a pop, I definitely think its worth seeing all your favorite Stern show characters like Gary the Retard and the Iron Sheik.  The funny thing about seeing those people is that they really don’t have any talent other than being themselves.  I wonder if they just invite Gary on stage to say something retarded to the audience, then people just laugh.  My guess is that they have Iron Sheik yell at something for laughs too.  Shuli and Bob Levy are pretty shitty but I think the novelty value outweighs their tired acts.

XM radio and Sirius announced plans to merge creating a single satellite radio provider. Details about the merger are sparse. So far we know the combined company will be chaired by Gary Parsons the old head of XM and the CEO will be Mel Karmizan the current head of Sirius Satellite Radio.

Here are my thoughts on the merger. Obviously XM was getting killed in the subscriber race after making the bonehead move of turning down Howard Stern….Really dumb choice Gary! Howard Stern was able to bring over more subscribers than originally projected and basically forced XM into action. So this begs the question, is this merger a good thing for Sirius shareholders? My guess is no and here’s why:

• The company (Sirius) is currently being valued a price to revenue multiple that is being driven by company growth. Sirius in the is case now is being merged into a slower growth company. So the revenues of the Sirius are going to be valued at the slower growth rate of the blended company.
• The programming from XM aside from their sports rebroadcasting is worthless. Especially those Howard Stern imitators Opie and Anthony! It would be safe to assume that all the duplicative music channels will be eliminated. The cost savings from losing these channels are minimal.  The biggest savings I think will be from the elimination of staff and office space.  With the removal of channels you can expect to see more esoteric types of music added just because the extra capacity is there, look at the cable TV model for an example.  Can’t wait for the tribal music station.
• What is going to be the universal subscriber rate? This is going to be interesting. Economics would dictate since their will be no competition between satellite radio stations, prices should increase. My thoughts are that this will NOT be the case since this merger will be heavily scrutinized by the FTC and DOJ. I don’t think they want to risk non-approval by price gouging. My guess is that the basic package will stay around the current subscriber rate of $12.95 and additional “premium” channels/services will cost more. Expect sports to call into the premium category.
• Equipment: This is going to be a quagmire. The two systems are currently very different from one another. Assuming they will want to combine into a single platform there is going to have to be a generational move off the old equipment.  This opens the door to more churn. Customers not wanting to buy another expensive radio for essentially the same service will just cancel their subscription.
• Howard Stern.  Now that his show is going to be broadcast to the subscriber base of XM as well he’s going to want to renegotiate his contract.  I guess its only fair since now more people are going to be listening to him.  Howard’s agent Don Buckwald is a tough negotiator, expect their to be some posturing before a deal goes through.  This means the new shareholders are going to bare the costs of a new Stern contract.

So now that we have a combined company with two different radios, a basic subscription and the same programming; whats going to make this new company vastly different from the old one?   Enter the Sirius Video Player!   Howard Stern has mentioned that he knows the capability is there to stream a few video feeds off the current satellite technology.   This discussion came up when he was talking about launching Howard TV, Stern’s on demand channel.   My guess is that this video technology will be the next generation application to move all the current subscribers on to a new platform.  This solves the following problems:

• All the new users of the Video player will be on the new service.  Which will require a new reciever that can be programmed to integrate the XM satellites(which should now be devoid of programming.)
• Users will be given the option of “paying up” to watch the Howard TV channel (which has already been producing shows for cable, I dont think its too far of a stretch to think they port the current programs over to the video service.)  They could also include sports into the video feed so people will be able to watch their favorite teams playing anywhere at anytime.  You can imagine this being a major growth driver for the company to move people off the current $12.95 subscription.  What Red Sox fan wouldn’t pay and extra $10 bucks to watch all the away games on a mobile device?
• The new player can also be integrated to add informational services like weather, traffic, scores, quotes and news headlines.  Creating a “dashboard” like information panel so people can quickly stay in touch with current conditions.

I’m very excited to see how this all comes together.  Stay tuned!