Disastrous Qtr for XM; Outstanding Qtr for Sirius

mwgiii

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XM Posts Slower Subscriber Growth for 2Q
Thursday July 6, 4:33 pm ET
By Seth Sutel, AP Business Writer
XM Reports Slower Growth in New Subscribers for 2nd Quarter; Sirius Tops Analysts' Expectations NEW YORK (AP) -- XM Satellite Radio Holdings Inc. reported slower growth in new subscribers for the second quarter Thursday, which the company attributed to problems with product availability and softness in retail sales.

Sirius Satellite Radio Inc., meanwhile, added far more subscribers than XM in the second quarter, beating analysts expectations and continuing to benefit from signing up the popular shock jock Howard Stern, who went on the air at the beginning of the year.

XM said it added 398,000 net subscribers in the second quarter, well below the 568,900 it added in the first quarter, leaving it with 6.89 million subscribers to date. Analysts had been looking for about 430,000 net additions, Oppenheimer analyst Thomas Eagan said.

Sirius said it added 600,460 subscribers, ending the quarter with 4.7 million. While that was down from the staggering 761,000 additions made in the first quarter, shortly after Stern joined Sirius, Eagan said the pace was still strong in the second quarter and reflected a continuation of "the Howard effect."
Analysts had been expecting 555,000 additions for Sirius, Eagan said. A Sirius spokesman declined to comment on the figures beyond a prepared statement.

XM's stock fell 38 cents, or 2.6 percent, to close at $14.11 on the Nasdaq Stock Market while Sirius' shares rose 5 cents, or 1.1 percent, to finish at $4.53.

In May, XM cut its estimates for full-year subscriber growth, citing softness in retail sales of satellite radios and product availability problems. XM currently estimates having 8.5 million subscribers by the end of the year, down from its previous estimate of 9 million.
Sirius said in late May that it expects to meet its previously issued forecast of getting to more than 6.2 million subscribers by the end of 2006.

XM's stock is down 48 percent since the beginning of the year on a variety of concerns, including the sudden departure of a director over strategic differences with the company; an investigation into the company's marketing practices and more recently the reduction of subscriber estimates. Sirius shares are also down, but not as much, about 32 percent, since the beginning of the year.
XM is locked in a fierce battle with Sirius to sign up programming talent and paying subscribers. Both services are available nationally, carry dozens of channels of talk and commercial-free music, and cost about $13 per month.

Eagan, the Oppenheimer analyst, said that despite several external difficulties for the two satellite radio stocks, long-term subscriber goals would likely be met as more cars are installed with the receivers at the factory. Sanford Bernstein analyst Craig Moffett told clients in a note that he also expects "rapid growth" in factory installation rates from 2007 to 2009.



Source:http://biz.yahoo.com/ap/060706/satellite_radio_subscribers.html?.v=7
 

charper1

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The only thing I somewhat disagree with in their comments is the "Howard effect" I think that was over around March.

I also hate hearing about "factory auto installs" I could care less if 1M units were placed in GM cars if only 100k were activated. They should only be reporting legitimate sub numbers. and in that case it appears Sirius is marketably better. The short time I had both I liked Sirius music offerings and DJ banter better. I can't listen to sports on radio after having TV for since birth. I WILL FIND a TV when my sports are on. LOL!

Thank for the story mwgiii
 

mwgiii

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I agree with you. I also have both. I strongly prefer the Sirius music channels. I couldn't tell you the last time I heard a DJ on the XM channels I listen to. Good DJs, to me, make all of the difference. If I want music with no entertaining DJs I will buy an Ipod.

XM has been getting killed by Sirius in their marketing and content for the last two years.
 

MergaTroy6

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Oct 18, 2004
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You left out and very important and rational part:

Oppenheimer and Co. analyst Thomas Eagan said Sirius' business continued to benefit from the "Howard Stern-effect", with fans of the ribald talk show host flocking to the No. 2 satellite radio service.

On the other hand, XM's growth has been hurt by a delay in shipment of its new handheld digital music players with built-in satellite receivers.

But Sanford C. Bernstein analyst Craig Moffett offered a more complicated answer that explained XM's volatile stock price on Thursday morning.

He said the difference in net new subscriber growth was actually an "optical illusion" due to the difference in the sheer size of the two satellite radio operators.

With churn, or the rate of losing subscribers at an industry average of about 2.5 percent, Moffett said XM would naturally lose more customers every quarter since it has a larger subscriber base

By virtue of its smaller size, Sirius loses fewer customers ... each quarter," he said. "As a result, its share of net additions will always be higher than its share of gross additions, at least until it 'catches up' to XM in sheer size."

To make up the difference, "XM has to grow more aggressively," Oppenheimer's Eagan said.

He said the gap between the number of net new subscribers each company added was approximately equal to their difference in estimated churn for the quarter.

The two companies, which are expected to post net losses for the foreseeable future, are also hamstrung by high marketing and subscriber acquisition costs, analysts have said.
 

dlsnyder

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It's still a pretty good adoption rate, given that they had to convince people to pay for something that they were used to getting for free. They started out in 2000 (I think) with nothing, and now they have about 11.6 million subscribers between them. I think it may be time to buy stock in Sirius. :)
 

charper1

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dlsnyder said:
It's still a pretty good adoption rate, given that they had to convince people to pay for something that they were used to getting for free. They started out in 2000 (I think) with nothing, and now they have about 11.6 million subscribers between them. I think it may be time to buy stock in Sirius. :)

I jumped on because I wasn't getting what I get now via terrestrial radio. I want near zero ads, unedited/uncensored music, and no "morning talk" lame comedy shows instead of music, unless I want to tune to talk or comedy specifically. To me it should be a real easy sell once people learn its not paying for the same thing AM/FM do.
 

HCI

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http://www.skyreport.com/#Story3

On Thursday, the nation's two satellite radio services reported customer gains for the three-month period that ended June 30.

Sirius said it added 600,460 net subscribers during the second quarter, about 64 percent above last year's second quarter net subscriber additions of 366,000. The company ended the period with 4.678 million subscribers, which compares to 1.814 million customers for the end of second quarter 2005.

The Sirius count beat numbers posted by XM for the three-month period. The top satellite radio platform added more the 398,000 customers during the quarter, taking its total to 6.89 million.

XM CEO Hugh Panero said second quarter subscriber growth was limited by product availability and overall softness in the retail channel. "As we approach seven million subscribers, however, XM Satellite Radio remains one of the fastest growing consumer entertainment products," he added.
 

HCI

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Jun 19, 2005
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I tell you I am feed up with XM. I never can access my account online, I never receive a bill from them so I can send them a check, and today they called me with a recording telling me I needed to contact them about my account!!! The actually called me to tell me to call them.

I know this is a mediocre reason to keep XM but the only reason I am keeping them is O&A and Ron and Fez or it would be out the window.
 
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Digital Dude

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We went with Sirius for one reason, Sirius has customer service in the US and XM is overseas, it's the same reason we refuse to buy anything Dell.

If enough of us vote our wallet for companies that employ our fellow countrymen and women we might make a dent.
 

daver40

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Jul 20, 2006
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XM is struggling, no doubt. Poor management, lousy customer service, and Hoo Hoo hit'em early this year. Still, they're number one, and have a better product. I expect them to persevere
 

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