American Idol — the talent show turned cultural icon — is more than just entertainment. The show is also a crash course in mobile media. In the 2008 season, the show generated 78 million text messages from viewers voting for their favorite singer. Even more startling: 22% of voters claim they first learned to text message by voting for their American Idol, according to a poll conducted by the network.

Mobile phones have come a long way from their humble beginnings. Now your phone has become an entire media platform. The possibilities are endless…

The iPhone Changes the Game

With the staggering growth of content available on mobile phones, it’s no surprise that the mobile advertising industry is picking up steam. The first step was paid content. Mobile users could text certain numbers to download ringtones and other content for a small fee. Now we’re seeing advertisers take advantage of the new capabilities of smart phones like the iPhone, the BlackBerry Storm and the T-Mobile G1.

Back in 2007, the new iPhone got off to a rocky start. AT&T (NYSE:T) — the iPhone’s exclusive carrier — announced the disappointing data right after the release. Customers activated only 146,000 iPhones during the first weekend, much less than the 500,000 activations predicted by giddy Wall Street analysts.

Since then, we’ve seen a newer, cheaper, faster iPhone hit the market — this time on a 3G network. And AT&T has finally managed to favorably work the iPhone into its rotation — even with the hefty kickbacks it sends to Apple for its trendy multimedia device. Yes, AT&T has sunk some serious dough into this affair, including $450 million on 3G network upgrades, according to Forbes. These expensive improvements were a major factor in the 23% year-to-year decline in the company’s net income last quarter…

But the 3G iPhone is finally beginning to bear fruit. AT&T has so far activated 4.3 million of the second-gen touch-screen phones— 1.9 million of them in the fourth quarter, according to Forbes. This more than doubles last year’s activation numbers — and nearly doubles Verizon’s activation data for the new BlackBerry Storm.

Believe it or not, the iPhone has changed something… it has changed the way we consume media. AT&T’s wireless division CEO says it best: “The success of our iPhone 3G launch has driven wireless growth and helped redefine the wireless data space.” As these mobile devices become increasingly ever-present, there’s no doubt that advertisers and developers will find new ways to capitalize on this growing media consumption.

Source: The iPhone Helps Mobile Marketing Mature

This from Today’s Financial News:

For satellite radio investors, these are the times that everybody knew was coming. Financial pundits have been writing about the industry’s certain doom for years. We all knew the notion of satellite radio was based around a shaky-at-best business model.

Not only did the industry’s originators have to shoot multi-million dollar satellites into the sky, they also had to convince millions of Americans to pay for something they were already getting for free.

XM and Sirius were vicious competitors at first, but quickly realized they could not survive without permanently joining forces. They petitioned the FCC for permission to merge and waited for nearly two years before they received a verdict.

Eventually, the airways regulator gave its blessing and Sirius XM Radio (NASDAQ:SIRI) was born in July of this year. The company may not make it out of its infancy.

Build it and they “may” come

It turns out the pundits were right. Few folks are willing to pay to listen to the radio. Sure, subscribers at Sirius grew like wild grass for the first few years, but the novelty quickly subsided and the supply of early adopters that propelled the industry through its first few years quickly dried up. Now, the burden of an immense plunge in consumer spending is about to force the company into bankruptcy.

The subscriber growth figures tell the whole story. In 2006, Sirius saw its subscriber base grow by 82%. In 2007, that figures was 38%. This year, it will be lucky to lock in growth of 10%. And next year, the company optimistically expects to expand its base by just 8%.

Those are the kinds of growth figures you would expect to find in a mature industry, not one with less than 20 million subscribers.

What is worse than the company’s declining revenue base is its monumental debt load. In the next twelve months, Sirius has over $1 billion in debt coming due. $210 million of it must be paid in February. Unfortunately, the company’s balance sheet shows no way for it to find the liquidity needed to pay its bills.

Combine huge debt, incredible talent contracts (Howard Stern has a $500 million, five-year deal) and a consumer base that is going broke and it is easy to see why shares of the company are trading at all-time lows.

With share price at just $0.15, shares of Sirius XM have plunged by more than 90% this year.

Bankruptcy and an equity valuation of zero should be a serious concern for investors. Unless the company can re-structure, find the investors and subscribers it needs and can lower refinance its debt, there is no way it is going to stay in business for more than a year or two.

Finally… some potential

But speculative investors finally have a shot at rewards with the company. In late December, Sirius shareholders will get together to vote on some very important issues.

First, executives are asking investors to approve a major dilution of their positions. The company wants to boost the number of shares outstanding from 4.5 billion to 8 billion in an effort to bring in much-needed capital. The move, while essential to the company’s future, would hammer the valuations of today’s shareholders.

To help make shares more attractive to potential shareholders, management would also like voters to approve a major reverse stock split, ranging from 1 for 10 to 1 for 50. If approved, shareholders would own dramatically fewer shares of the company, but those shares would be worth much more.

With so much negativity priced into this company, it is hard not to be at least a tad optimistic.

For investors getting in at today’s prices, the upcoming shareholder meeting could lead to profits. After all, it is bound to bring increased press coverage and any good news could lead to short-term price spikes.

Volatility will be the key to this stock over the next few months. If you can stomach the ride and the very real threat of bankruptcy, there will be some shots at fairly large profits.

I will let you decide if such a risky play is for you.

Source: Sirius XM (NYSE:SIRI): Is this a buying opportunity?