Tomahawk, WI 04/02/2014 (Basicsmedia) – Satellite radio pioneer Sirius XM Holdings Inc. (NASDAQ:SIRI) is seeking to widen the moat around itself and keep the competition at bay with unique ventures including providing the most extensive coverage ever for the 2014 Major League Baseball season. Sirius is the Official Satellite Radio Partner of MLB. Annika Sorenstam is going to debut today, April 2, with a new series on SiriusXM PGA Tour Radio. Will exclusive content such as these be enough to keep its subscribers happy?

Sirius announced that it is now available to most Avis Car Rental and Budget Car Rental customers with Sirius satellite radios factory-installed in those cars.

Financial Picture

It had revenues of $1.0 billion in 4Q2013 and $3.8 billion in FY2013. It reported net income of $65 million for 4Q2013 and $377 million for FY2013. Income from operations amounted to $245 million in 4Q2013 and $1.0 billion in FY2013. Adjusted EBITDA increased by 41% in 4Q2013 to reach a record $326 million. Adjusted EBITDA for FY2013 was $1.17 billion representing an increase of 27% compared to $920 million in FY2012.

Liberty Media owns 53% of Sirius shares. Recently, Liberty cancelled its offer to buy all the shares in Sirius XM. Among other factors that will likely help boost its share price, Sirius XM continues its share buy-back program in which it spent $160 million in 4Q2013 to buy back shares from Liberty. It spent $1.76 billion in 2013 to repurchase 520 million shares in total.

Sirius XM Holdings Inc. (NASDAQ:SIRI) has 21.1 million self-pay subscribers and this subscriber base increased slightly — by 0.4 million — in 4Q2013.

Many analysts have a price target of $4.00 for Sirius stock and a “buy” rating.

New Competition

The danger to Sirius’ future lies from emerging competition from tech giants such as Apple Inc. (NASDAQ:AAPL). National Public Radio is reported to be coming to Apple’s iTunes Radio. This will give a strong fillip to Apple’s attempts to diversify its offerings.

The launch of Apple’s CarPlay early in March is another potential danger for Sirius. With the integration of CarPlay into cars at the factory level by leading manufacturers such as Mercedez-Benz, Volvo and Ferrari (and a dozen more soon), it’s going to be a breeze to use iTunes Radio, music, podcasts and audiobooks. The navigation will be through car’s built-in audio controls or even just asking Apple’s ‘Siri.’

One more challenge to Sirius might come in the form of Spotify which appears to be preparing for an IPO. Just like Sirius XM Holdings Inc. (NASDAQ:SIRI), Spotify also gets most of its revenue from subscriptions.

With all this in mind, it’s worth asking: how sustainable is Sirius’ business model?

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