It's no secret that Sirius XM's business has been hurting. Its recent brush with bankruptcy merely highlighted the huge obstacles
the company faced from the beginning: massive capital outlay on satellite infrastructure, and huge spending to attract subscribers. But one key issue for the company that many people didn't foresee was the rise in popularity of internet radio, podcasts, and portable music players. Included in that group was Martine Rothblatt, Sirius' founder, who now says competition from those media, spurred on by growth in mobile networks, have doomed satellite radio
(via Paid Content
). Sirius XM CEO Mel Karmazin, of course, disagrees, saying the company has enough unique content to succeed. But what happens when streaming services become even more pervasive, more portable, and available to a wider audience? Sirius XM's exclusivity to certain types of content in locales like automobiles will slip, and being tied to its proprietary hardware and subscription model could become a liability. The company is growing its efforts in this area, such as with its recently announced iPhone app, but more fully embracing online radio
would seem to be a brighter strategy.