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Sirius XM 1Q Loss Narrows, Posts Net Subscriber Loss

Discussion in 'Sirius XM General Discussion' started by Richard King, May 7, 2009.

  1. May 7, 2009 #1 of 13
    Richard King

    Richard King Hall Of Fame DBSTalk Club

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    http://custom.marketwatch.com/custom/tdameritrade-com/html-story.asp?guid={2dd20b60-49d3-4994-9db8-e849676caa56}
    More...
     
  2. Dolly

    Dolly Hall Of Fame

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    Mr. King you know I don't understand a lot of these things. How does Sirius XM loss narrow and yet subs are down? I don't think it is surprising that subs are down--the economy is poor and car sales are really, really, awful now plus all the fall out over the channel changes.
     
  3. Richard King

    Richard King Hall Of Fame DBSTalk Club

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    Siriusxm pays an incentive payment to the installing dealer (car dealer or electronics dealer) plus a subsidy to the customer for each system installed. If the number of systems installed goes down they aren't paying out those subsidies and, hence, profits go up (or losses go down). Dish is in the same boat at the moment. They are losing subs, but profits are rising. I was one of those that disconnected, although, with the right deal (a talk only subscription for under $5 per month) I may be back after 6 months has passed. Six months will have been enough time to pay for my Slacker hardware, and the music is free with Slacker (a subscription is optional). My Slacker has now replaced XM for my music listening. Also, for some reason I am able to pick up more AM talk stations now than before I had XM, so I may not even need to return after the 6 months.
     
  4. djlong

    djlong Hall Of Fame

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    In addition, "parking lot subs" are not being counted. After the Liberty investment, some interest costs are down, some people have been let go. This is how you save money when even less is coming in.
     
  5. Dolly

    Dolly Hall Of Fame

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    Thanks to djlong and Mr. King for explaining this situation to me :)
    It makes perfect sense to me now, but I guess I don't understand business enough so I have to have people explain things to me.
     
  6. Steve Mehs

    Steve Mehs Hall Of Fame

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    Losing subscribers but making more money is a fairly simple concept. Subscribers aren't the whole source of income. You've got advertising revenue, which I'm sure they charge more now since the subscriber base has almost doubled, and then you have the endless amount of crappy payola channels, like AC/DC Radio and Mandatory Metallica, which I'm sure SiriusXM is making a nice buck off of. Not to mention with the massive amount of layoffs, payroll is down as well.
     
  7. djlong

    djlong Hall Of Fame

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    Steve: Payola channels? What makes you say that the AC/DC or Metallica channels are paid for?
     
  8. Ken S

    Ken S RIP

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    Dolly:

    SiriusXM reduced costs by:

    1. Consolidating business operations.
    2. Laying employees off.
    3. Consolidating music channels
    4. Reducing marketing costs (advertising)
    5. Less new customers means lower Subscriber Acquisition costs.

    They lost customers because:
    1. Economy is horrid - New car sales are very bad.
    2. Consumer electronics sales are down - Circuit City gone
    3. People dropped because of consolidation of music channels.
    4. Dual subscribers dropped either XM or Sirius.
    5. Price increase on extra radios, internet listening.

    So, in some ways they're doing the right thing - they've gotta reduce costs even further...but they also need car sales to pickup and to regain momentum.
     
  9. Steve Mehs

    Steve Mehs Hall Of Fame

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    Come on, you really can't see it? There is no logical mind that believes these lame single artist/band channels are anything but payola and promo tools. Just about every single artist channel was launched when said artist/band was coming out with a new album or tour. It's a lame gimmick, decent channels are sacrificed for this crap, why else make such a stupid move other than if your receiving large sums of money to do so.
     
  10. djlong

    djlong Hall Of Fame

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    Well, they would have to report that income in their financials. I'm a stockholder and there's no mention of anything like that.

    What's MORE likely is that this is a continuation of what started with XM several years ago. That is, they look for demographics to appeal to. They get the word out that something special is coming out for fans of that band. This is what got me to decide on WHEN I would buy my first XM radio. I'd heard, through fan sites, that my favorite band was going to be in XM's studio for a live performance.

    So you get the word out, get fans of whatever band it is you're promoting - and it generally coincides with new releases or tours because that's when fans are being more active.

    Sirius copied the idea that XM had and went further with it. XM would do specials where, for a couple of days, one artist took over a channel. Sirius decided that if a day or two was good, a month or two would be better.

    Also, consider this. Payola is *illegal*. If you're getting paid for your bandwidth, it has to be an arrangement like the Clear Channel situation - you're turning over part of the pie in exchange for compensation. XM specifically tried to get OUT of that contract and couldn't. With all the other things that the FCC chased them down for (like the FM modulators that were too strong), you think they wouldn't have brought up 'payola' during the merger review process?

    To me it's Occam's Razor. Is it more likely to risk fines and court cases by allowing payola or is it more likely they're trying to grab paying customers by seemingly catering to their desires? After all, I believe Sirius is now selling 'music only' subscriptions for those who don't want to pay for the rest of the stuff. And since ads for those specialty channels are what I hear on Channel 1 when I need a reauthorization, it seems to me that it's promotion, not payola.
     
  11. paja

    paja Godfather

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    The month Paul McCartneys "Fireman" cd came out, we got -The Fireman Channel for a month. It is apparent that the record company(or MACCA) pays a fee for XM to carry it.
     
  12. aquatic

    aquatic Cool Member

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    So I got Sirius in the new van last year.. in April my old XM comes up for renewal--I like it, use it in the commuter car, and call to re-up.

    "I'm sorry sir, there's no discount for the second radio when they are different--XM vs Sirius I mean" I asked if they were ONE company now and all that, and even with positive responses...There was NO WAY for their accounting systems to sync different accounts across the business units.

    My reply? "Cancel it." technically they lost a sub there, cause they had me counted twice with the XM and Sirius subs.
     
  13. zman977

    zman977 Godfather

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    that would be payola which as has been said already is illegal. It is purely a promo tool to get people talking. More than likely SIRIUS/XM pays the licensing fee to BMI or ASCAP to play the music on that channel.

    On the subject of dropped subscribers my wife and I have tried to cancel our SIRIUS subscription several times in the last year but they keep giving us free months. I think in the last year we have been given eight months free. We have been subscribers for four years and were cancelling for financial reasons. I wonder how many other long term subscribers they are doing this for.
     

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