Access Atlanta > Entertainment > Radio Talk > Archives > 2007 > January > 05
Friday, January 5, 2007
1/5: XM-Sirius update
The Atlanta Journal-Constitution
I’ve been reading the latest results from XM and Sirius and there are plenty of clouds of trouble ahead.
They have spent far more money than they had originally anticipated for programming and seeking new customers. Their early break-even points back in 2001-02 were around 4 to 5 million subscribers. XM is now at about 7.6 million and Sirius at more than 6 million. Yet neither is remotely close to profitable (although both claimed to be “cashflow positive” during the fourth quarter, which isn’t the same as profitable since it doesn’t take into account issues like debt.).
Retail sales have been slower than expected for both companies and each has had to scale back expectations. A year ago, XM predicted 9 million subscribers by year end. Both companies’ stock prices have, as a result, taken major hits to boot. Analysts say sales through places like Best Buy and Circuit City were down 50% this year over last year when there was excitement over Howard Stern joining Sirius. But car sales are where the growth is now that satellite radio is maturing.
Here’s an AP story about it.
I had coffee today with Mike Stiles, former Star 94 Steve & Vikki producer and current morning host on J93.3. He agrees that Sirius and XM are fated to merge at some point. The question is when? And will the FTC go for it?
