NEW YORK (TheStreet) -- TheStreet's James Rogers provided a fine recap of this morning's Sirius XM (SIRI) earnings release. Mel Karmazin started off the ensuing conference call the same way he always does, boasting about churn, subscriber additions, free cash flow, strength in an uncertain economy and increasing auto sales.
|Mel Karmazin, CEO of Sirius XM|
Shortly thereafter, the stock market did what it often does on apparently "good" news from Sirius. It watched a gap up at the open, as SIRI loyalist longs and other retail suckers made the cardinal error of buying out of the gate, only to send the stock into its familiar stagnation mode within just a couple of hours.
In general, we don't believe that the IP business for audio content, the radio content business, where the royalty fees are so extraordinarily high and you are at the mercy of advertising revenue, particularly as the advertising moves toward the smartphone and the limited opportunities that you have to monetize that through different types of advertising. So we're not big fans of it. On the other hand, we are very big fans of giving our subscribers what they want, not just in the car. So you should think of our 2.0 strategy as being to super-serve our subscribers.Investors should heed two words at this point: Run Away. Generally, when you invest in your business you expect a return. By "super-serving our subscribers," but not doing meaningful things to attract new ones or open up some other lines of revenue, you'll be hard-pressed to generate the types of results Wall Street wants to see.
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