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Business Makeover: Sirius XM


If it's broke, fix it.

The July merger of Sirius and XM was supposed to be just the boost the struggling satellite-radio providers needed to overtake their terrestrial competition. But last week, the broadcaster reported a third-quarter loss of $4.88 billion. Although revenue increased, it wasn't enough to compensate for the reduction in consumer discretionary spending.

With the company's stock now trading at roughly a quarter and music fans increasingly relying on their MP3 players -- or toughing it out with the FM dial -- how can Sirius XM (SIRI) change channels?

Tap into Christian rock's growing audience: Between Creed songs, program sermons that demand that listeners recruit other Sirius XM subscribers.

Lucy, Fred and Ethel -- XM's popular alternative channels -- were victims of the merger, as were 4 Spanish-language channels. Debut a station called "Ricky" that plays Spanish songs, but can also fit right in with Lucy, Fred and Ethel.

Since September, Sirius XM's stock has been hovering at less than $1 on the NASDAQ. Consider a federal bailout in exchange for serving as the government's chief source of propaganda.

Declining automobile sales hit subscriptions hard. Develop receivers that can be powered by pedaling a bike.

Howard Stern is a big incentive to subscribe, but satellite radio's uncensored format leaves him with fewer boundaries to push. Instruct cast member Artie Lange to have a drug relapse during an execution segment.

Remind customers: Music that's available free of charge always sounds better when you have to pay for it.

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No positions in stocks mentioned.

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