Media giant John Malone is now one step closer to achieving controlling interest in Sirius XM Radio, Inc. (NASDAQ:SIRI).
Yesterday Malone’s Liberty Media announced that it increased its stake in Sirius from 48% up to 48.8%, with an additional 40 million shares purchased. Liberty formally announced its intentions to “own more than 50%” of the satellite radio provider a little more than a week ago.
The stock of Sirius has been going up, partly due to the Liberty news, partly due to Sirius introducing new, relevant options for its 22 million subscribers. Earlier in August SIRI launched its on-demand service which allows for a more customizable experience, similar to what Spotify and Pandora Media (NYSE:P) offer.
Even though the on-demand catalog is still very limited and consists of about 2000 hours of talk shows, Sirius intend to expand on it. The service is currently available on iOS and through the Sirius web player, with plans to bring it to Android devices in the immediate future.
This type of customizable streaming material is the main reason Pandora became such a big name in the business and it seems SIRI are willing to adopt the successful model. Pandora is built around free radio that is ridden with commercials while Sirius offer subscription services and generate a lot more revenue. A potential further increase of their user base, which is already growing at a pace of about 2 million subscribers per year, would mean a huge increase of revenue as well.
While some investors may worry what will happen with Sirius once Liberty acquires 50+% of their shares and recommend skipping the middleman and buying Liberty right now, SIRI look like they are on the right path. Once their already solid content library becomes customizable and available for download the way podcasts are, the company is looking at a considerably better market position.
