
The Sirius management team decided they needed to differentiate themselves from the big elephant in the room and implemented a new strategy. You see, XM had a strong distribution deal, especially their long term General Motors deal. XM also had better technology and also had great partnership deals. XM also had such a strong market lead, they were taking about four unit sales for every one Sirius deal. This gap was widening every month and there were no signs it was slowing down. XM valuation was 20x that of Sirius, and the trends were going in opposite directions.
Well, there was a turning point that started the turn around for Sirius. This was when the management decided to compete in a different way. They decided to compete for the potential satellite radio customer by signing exclusive content deals. This was a complicated decision as it would cause the pricing for deals to be exponential of the non-exclusive, and the economics were scary. The issue also could put Sirius in a really bad spot if they created a market that could drive any chance of profit out of the business. But, they had no choice. They could not compete in the market that existed already.

Long story short, they are winning the battle, and there are signs they could win the war longer term. They signed exclusives with the top properties within the radio world, including Martha Stewart, Howard Stern, The NFL, Nascar, NBA, NHL, NPR, Playboy Radio, Maxium Radio, English Soccer, Richard Simmons, Eminem and many other stars. They also have signed exclusive deals with some stars such as: Lance Armstrong, Jimmy Buffett, Tony Hawk, and Grandmaster Flash to name a few. XM has signed the MLB as their exclusive content. This is a good summary of the different in approach between the two approaches. XM has now shown signs they are going to sign some exclusive content, though it second tier at best.
Anyway, this approach is what has helped Sirius begin to compete and become a legitimate

One additional note of importance, Sirius can’t lose this focus and strategy. There have been some early signs that they are getting fat and comfortable a little too quickly. The fact that they can’t get the technology out quicker, they can’t launch streaming for all their shows, they don’t have podcasts, they are losing important deals such as Fox News, is a concerning sign. If a few more of these signs show-up in the market will flag a potential weakness in the Sirius management and approach. I will be keeping my eyes open.