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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?
Comments
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By Bud
January 8, 2007 9:03 AM | Link to this
They’ve both lost tons of money, and I’m sure some of the investors have enough pull with the government to get the merger done. If they can restructure the Stern deal, slowly increase their monthly rate from $12.95 to $19.95, slowly introduce more and more advertising, get more subscribers (while keeping their ad costs from expanding) and get a deal with Ford or GM, they should be able to survive. You satellite subscribers better run to CVS and buy the lube jell now so you’ll have it when you need it.
By jungleland
January 8, 2007 9:31 AM | Link to this
I have to say after 6 months of XM I have grown tierd of it. I have not listened since before Christmas.
The New Fords and GMs (and many other models) will ALSO have an I-POD connector…This is going to eat XM and Sirius’ lunch.
XM is good for talk radio (O&A), but for music it’s just OK (better than FM, not that much variety within any station) I find myself flipping between stations even more than on FM.
The i-pod playists are just more fun than anything that XM or Sirius can come up with. Yestersday was “All-Beatles Playlist”(every song The Beatles have ever recorded) today was The Best of The Doors and The Killers’ Sam’s Town… the way home tonight? Stevie Wonder? Jet? Pink Floyd? Springsteen? Live Stones? maybe all of them - I have 9,400 songs to choose from. The random options is very cool too.
By gttim
January 8, 2007 11:47 AM | Link to this
Funny how Sirius has almost caught up with XM. I remember when it had a small percentage of XM’s numbers. I was a very small part of that when I dumped XM for Sirius. Sirius has much better music, including The Underground Garage.
People have been saying for years that XM and Sirius would never make it, that they would have to merge, blah, blah, blah. They have about 14 million paying subscribers between them. It seems like they are doing good.
I fail to see how merging would help them. One of the huge costs associated with these ventures is putting the satellites above the US. XM has two and Sirius has three. They are using repeaters in big cities. Their systems are fairly distinct and different. By merging they have to trash one system. How does that save them that much money?
By Lanny Fram
January 8, 2007 2:00 PM | Link to this
They can’t merge, the hardware isn’t even remotely compatible. Ok, which companies subscribers do you force to go buy the new reciever? That idea is poorly thought out.
By Kev
January 8, 2007 3:13 PM | Link to this
Anyone considering buying satellite radio, DO NOT WASTE your money if work in an office with no windows! I made this mistake. They’ve pretty much told me tough S* you can listen online(which sound like garbage and I already spent a lot of money on a stupid Sirius “boombox”. It siriusly sucks!
By Bud
January 9, 2007 10:38 AM | Link to this
Hey…it gets even better…despite losing money hand over fist and losing more than 40% of its share value in a year, Sirius just gave Howard Stern an $83 Million dollar bonus on top of his $500 Million dollar salary. It’s good to be King (of all Media)
http://www.msnbc.msn.com/id/16539806/
By Vince
January 9, 2007 11:22 AM | Link to this
Waa, I don’t like satellite radio, waa, it sucks, waa, Howard Stern got a raise for more than doubling Sirius’ subscribers in 1 year.
I’ve had Sirius since 2004 (pre-Stern days), and I’ve never looked back. Anyone that complains about satellite radio isn’t listening to it. I’ve never been left wanting for entertainment with all the channels they have. I can’t stand listening to terrestrial radio anymore. Cable television and satellite television also all “lost tons of money” when they were start ups, and look where they are today. This technology has only been available for like 3-4 years, and already everyone is trying to bury it—especially the companies that own terrestrial radio stations—right Cox Communications?
Isn’t it surprising that every satellite radio-related article that has shown up on this Cox-owned newspaper website talks about how bad satellite radio is doing. Hmmm…
By Joseph Mills
January 18, 2007 9:44 AM | Link to this
XM and Sirius will probably merge, but the FCC is going to end up regulating it if they do it. It will happen before 2009 when both companies have to make a balloon payment for the sateillites.
XM Radio is the best entertainment investment I have made. Atlanta local radio, with the exception of WNNX-99x, sucks. 99x is still the only station that strives to be entertaining. As for XM vs. Sirius - Opie and Anthony beats Howard Stern hands down in the number of listeners and quality. The quality of programming with all their channels is excellent. I have the XM SAMSUNG NEXUS - which records XM live. I can listen to XM in the office via www.xmradio.com (which has a free trial for anyone who wants to try it out.)