As automakers move rapidly toward embedding Internet connectivity...

call. The dual offering will likely include a 50-channel on-demand service that’s expected to further expand this year, analysts said Tuesday. The on-demand service is part of My Sirius XM, which started in April and allows subscribers to customize channels in more than 100 different variations. My Sirius XM is available to Sirius XM’s Internet streaming desktop PC subscribers, who pay a $3.50 fee on top of the $14.99 monthly charge for the in-car service. “Having satellite connectivity and IP in vehicles will prove to be a durable advantage versus IP only as we move into the connected car world,” Meyer said. “You will see automakers move to embedded connectivity that will be LTE-based that will give them lots of options for what they want to do for their customers and their vehicles.” As a result of the changes under way in the auto industry, Sirius XM is “moving and reprioritizing” development efforts and commercial programming toward building connected-car technology, Meyer said. “I don’t see right now one single emerging competitor in the connected car space,” Meyer said. “The connected car is more of a strategy right now, and I think everybody is looking for a chair at the table and it’s really important that Sirius XM occupy one of those.” The IP embedded and “tethered” markets will co-exist for a “long, long time” with the latter getting content through non-LTE means, Meyer said. With Sirius XM having had discussions with automakers on the 2017 and 2018 models, “as I look at many of the applications down the road, it seems that embedded architecture works best and I would be surprised if all automakers don’t eventually do both,” Meyer said. Sirius XM stock closed up 5.9 percent to $3.25 Tuesday. The company’s Q1 net income improved to $123.6 million from $107.7 million in the year-ago quarter, as revenue rose to $897.3 million from $804.7 million. Self-pay net subscriber additions grew by 443,000 last quarter to end Q1 with 24.4 million, up from 23.9 million in December. Subscription sales jumped to $783.3 million in Q1 from $700.2 million in the year-ago period, while ad revenue rose to $20.2 million from $18.6 million. Total operating expenses increased to $650.4 million from $605.4 million, including a jump in revenue share and royalties to $148.5 million from $132.1 million. Sirius XM started paying slightly higher music royalties under a Copyright Royalty Board decision in December. The CRB decision called for Sirius to start paying this year 9 percent of annual gross revenue as a royalty to SoundExchange, which represents music companies and musicians (CD Dec 18 p8). Sirius, which had been paying 8 percent, will see steady increases in 2014 (9.5 percent), 2015 (10 percent), 2016 (10.5 percent) and 2017 (11 percent). Sirius XM’s penetration in new cars remained flat in Q1 with the previous quarter at 67 percent, but the number of registered cars containing the service grew to 52 million from 50 million, and up from 42 million a year earlier, the company said. Satellite radios are in 22 percent of U.S. registered vehicles, Meyer said. The number of satellite radio-equipped vehicles is forecast to grow to 100 million by 2017 and 150 million in 2023, he said. Sirius XM added about 1 million subscribers from used cars in 2012 and is forecasting bringing in another 1.5 million this year. Sirius XM is adding Comedy Central and Entertainment Weekly channels in June.