Re: NY Post - "STERN EYES FREE RADIO"
Quote:
Sirius isn't in any great position either with a $500 million
deal being paid to Stern and stock at an all-time low. Let's
not forget that neither companies are making any profits. |
I think sometimes this gets over evaluated. Stern's $500M/5 Year agreement is not paid out in a giant lump, with the exception of stock escalators which are figured in. It's $100M/yearly and covers all programming on both networks. In the end, this is a smaller expense then XM paid out for Baseball by a fair margin, and so far, I am struggling to see the giant benefit in subscribers MLB has provided. I'm sure it's provided some, but in the marketspace of a year, XM went from controlling 82% of the market (when they were at 3.1M/625,000 for SIRI) to this year, where at 6.5M/4.2M they now control less then 60% of the market space. If you're SIRI, you have to be happy with that. Yes, XM doubled in size. Good for them. But SIRI went almost eight fold their subscription base.
Quote:
It benefits XM greatly. XM gets mentioned on the FM show daily.
That's advertising. Additionally, people who become fans of O&A
through that show are going to consider migrating over to XM radio
for an "uncensored" version of the show, and an additional 2 hours
of show that is exclusive to XM radio. |
And I get that to some extent, but seriously, if they continue to mention Howard, are they not basically at least promoting SIRI to some extent at the same time? It's fine when you're on a pay service to rip him up, but when you're on free airwaves, you're just giving him mentions and reminding people of where he went.
More then that, if people can get something free, is there a great incentive for them to pay? For "more" profanity or whatever? I'm sure there are some people who like the edited show just fine and think "eh".
XM has suffered badly over the last three quarters. Forget O&A or Howard, Ron, you have to look at the writing and see it. You have threads in the XM forums of people wanting to cancel, you're complaining about quality of service, and you've got a lower renewal and new subscription rate then SIRI. That's not just anecdotal, that's based on their sales figures as they release them.
Neither company is making profit, though both are on track to get there, and I think both will make profit. But SIRI right now is the market leader. They are throwing out a much more cohesive marketing strategy then XM. SIRI doesn't have board members coming out, quitting and railing on the strategy of the company. They aren't losing big-time exclusives like NASCAR. They are facing federal review for advertising.
O&A can say whatever they want and that's fine. Like I said, don't listen, don't care, which is of course my choice.
But when I look at the positions they are in right now, if I were to bet, I wouldn't put a heavy bet on XMSR right now.
http://www.thestreet.com/_tsctten/st.../10283682.html
This about sums it up. We can talk about SIRI stock, and XM stock (did hold both). But XMSR has been in a freefall. And when their exec sells at $28.50 and a few months later we're falling below $17, then people get unhappy.
Quote:
| It has been a tough year for satellite radio stocks in general. But XM has been particularly hammered. Its shares are down 35% for the year, putting the company's market cap about $2 billion below that of its smaller rival, Sirius |
Sums it up.
Right now, XM is basically giving away subscriptions to keep people from leaving. Call them and tell them you are going to move to SIRI, and they will offer you an incredible discount on your XM.
SIRI is getting free advertising through O&A and whoever as long as Stern keeps popping up in the media, and they are making out like bandits on the NASCAR circuit where they have basically setup tents at races. And, while people hate it (and I am not a NASCAR fan) most NASCAR fans like the radio broadcasts far more then the TV or just to watch, as it allows them to hear the "in car" and other information they value so highly.
Right now, the basic claim being made that no one approached Stern is just a ridiculous one, no matter who made the claim. The marketplace dictates that stations basically have to do it. Whether he says no or not. But I don't understand why XM people worry about this at all, or why they feel the need to leap into this.
I wish good luck to XM, it helps to have competitors in the marketplace. XM has one more Clear Channel (commercial) station they are legally obligated to add, and I will be interested in hearing the catterwalling when that goes down.
