There’s a new way of doing business…
It’s really not new.
Actually, it may be one of the oldest business practices there is – but seeing it being applied to 21st Century business gives it a sense of newness that makes it refreshing.
I keep expecting things to change in that area – but it seems business is both timeless and universal – the exchanging of ideas or goods for money or other goods seems to be the way it has always and will always be.
So, business doesn’t really change – just the companies do.
Now, it seems two of those companies are going to be mixing their ideas together and it could create one of the most powerful media companies ever…
And I think we’ll be seeing more of this kind of merger going forward.
What are we talking about here?
Well, in case you haven’t heard – Sirius XM (SIRI) is making a play for music streaming system Pandora (P) for a straight up, all stock deal.
The deal is worth $3.5 billion when all is said and done, and both companies hope that this move will put the new entity on scale with both Apple Music (AAPL) and music-streaming site, Spotify (SPOT).
So, yes, a merger between two companies is nothing new…
Mergers have been happening since the dawn of business, right? So what makes this merger so much different?
Well, it’s what could come out of this that makes it a much different animal.
Understand, SiriusXM has a sweet spot when it comes to American broadcasting…
It has partnerships with almost every major car company on the road today – and I mean nearly every one.
Ford (F), Chevrolet (GM), Fiat (FCAU), Honda (HMC), Toyota (TM), BMW (BMWYY)…
Everybody.
I mean, it has even got a partnership with motorcycle manufacturer, Harley-Davidson (HOG)!
These unique partnerships are an incredible asset for Sirius XM and makes them one of the most listened to broadcasting companies in North America.
But…
Radio broadcasting is dying on the vine. With the advent of Bluetooth technology and online streaming – less and less people are listening to the radio every day.
And why would they?
They can’t control what they hear. They have to accept whatever song the station is playing or, even worse, they wind up having to listen to commercials for goods or services that they’ll never buy, taking up valuable time in their day.
Sirius XM was different…
At one point – the appeal of Sirius XM was its lack of commercials. Instead of financing operations with advertising money – Sirius XM charged a monthly fee to be a part of the network.
But that changed…
Slowly, but surely, commercials started making their way into satellite radio – not as much as terrestrial radio – but some commercials nonetheless.
Streaming music companies like Spotify, Apple Music, and even YouTube (GOOG) offer 100% commercial free content for subscribers and the listener can control what songs they listen to.
It’s almost a no-brainer as to why somebody would make the switch.
However…
There are still millions of people who listen to radio – so while it’s not dead yet – the future may be limited for that kind of broadcasting business model.
If a broadcast company wants to step foot into the 21st Century – they need to offer streaming and controllable content.
By acquiring Pandora – that’s exactly what Sirius XM is doing.
XM is hitting the ground running by owning Pandora’s music streaming technology – which isn’t much different from its previous business model…
Except now, its listeners will be able to control what they’re listening to.
And I feel that’s what we’re going to see going forward in other ways…
For example, I wouldn’t be surprised if we see one of the major television broadcast companies make a play for a company like Nextflix (NFLX)…
Maybe not actually Netflix, though…
Honestly, it’s probably easier for Netflix to buy one of the existing television companies – than the other way around.
But it’s more than that…
Could you imagine if a company like Netflix got into the gaming world?
Or maybe a company like Sony (SNE) getting into the Social Media world?
These kinds of mergers are going to keep happening…
Where businesses are going to find the compliment to their existing model that will send revenues and profits through the stratosphere.
And you know who will be there and ready to profit?
If you guessed GorillaTrades – you’d be right.
With our trading matrix – our picks are ALWAYS a step head. The program sees the data and is able to recognize those patters that the naked eye can miss.
We’d love for you to join us…
But if joining isn’t for you – keep your eye on this merger and see what happens in the near future…
Something tells me you’ll be glad you did.
“I continue to be interested in new things that seem old and old things that seem new.” – Jaquelin T. Robertson