XM Satellite Radio "outperform" (1 Viewer)

I've seen these figures reported several times around the net today.

If they are accurate, it would mean that even after all the Letterman, Daily Show, 60 Minutes, Bill O'Reilly, and magazine appearences that Stern did about his move to Sirius, not to mention the FULL DAY Yahoo! coverage, XM still outsold them.

I can't imagine that feels good when you banked a half a billion dollars on one show pony to deliver you to the promised land.

And will the numbers continue to flood in, or was this it for his "fanbase"?

I guess only time will tell....but I have to laugh, considering how all I heard from the Stern fans over the last year, was how Sirius was gonna SLAUGHTER XM this quarter. That they would at least sell double or triple what XM sold.

As a fully-loaded XM subscriber (2 Sky-Fis, 1 Roady, 1 XMPCR), I always root for XM's success, but you can't really dissect these numbers without more info. I've read XM disclosure statements, and subscribers include, among others, those who get free trial subscriptions offered with new car sales. That's an area where XM tied up a lot of manufacturers early. In other words, you really have to get into the numbers before you can discern trends.

Also, while XM subscriptions outnumbered Sirius, they're now closer to 50/50 than the historical numbers. It certainly doesn't suggest Sirius is overtaking XM, but it does suggest that over time the difference in market share may narrow.

As a purely anectdotal observation, I see more and more people carrying around Sirius units to checkout lines, and in my office, it seems like many people who are about to get into satellite radio are going with Sirius. Sometimes Howard's the reason, sometimes it's a reaction to the recent publicity push (not a separate factor from Howard, I know). Most people I know don't know or care about the differences in the two brands. Some prefer the smaller playlists that Sirius offers (go figure).

The idea that the full effect of the Howard move has already been felt is unfounded at best. I'm a Howard listener who won't switch primarily because I prefer XM programming, but who knows how long it'll take for other people to make their choices?

Like most of the rest of us, I have no idea how this will play out.

6 Million Sirius Ear Infections
Sirius hits another milestone, which happens to be another terrestrial radio headstone.

By Rick Aristotle Munarriz

Updated: 9:50 a.m. ET Dec. 27, 2005
Like emperor penguins making their annual migration to their mating grounds, Howard Stern fans are beginning their trek toward Sirius Satellite Radio(Nasdaq: SIRI). This morning the company announced that the company now had 3 million subscribers.

If you need to put that number in context, consider that back in January Sirius was expecting just 2.5 million listeners by the end of 2005. It's not the first time that the company has lapped its public targets. In July 2004 the company told investors that it was on track to hit a million subscribers by the end of 2004 and wound up with just more than 1.1 million members.

The logical explanation would be that Sirius is stealing away satellite radio fans from larger rival XM(Nasdaq: XMSR) but that isn't the case either. Back in February, XM was expecting to close out the year with 5.5 million subscribers. After landing 1.8 million new members through the first nine months of 2005 XM raised its target to 6 million subscribers. XM has also found itself upping its outlook several times during the previous years.

So what's going on here? Where did these 9 million listeners come from? Well, we know where they're coming from. That only leaves us with a new set of questions to tackle. Is terrestrial radio really that bad? Is SatRad really that good?

With AM and FM bands available for free in most cars and a dirt-cheap conventional radio being all that's necessary everywhere else, a large chunk of the audio content loving public has decided that they would rather spend $50 to $250 on a satellite radio receiver and pay either XM or Sirius $12.95 a month for their slate of digital radio content.

It's not as though Clear Channel(NYSE: CCU), Cumulus Media(Nasdaq: CMLS), or Viacom's (NYSE: VIA) Infinity Broadcasting are going down without a fight. Terrestrial radio is battling back by trying to speed up the rollout of digital "high definition" broadcast standards.

Still, it's not going to be easy. Conventional broadcasters don't have the subscription revenue to help subsidize commercial-free music. That has been a big selling point for XM and Sirius subscribers who flock to each provider's roughly 70 different dedicated music channels after tiring of chatty disc jockeys and long commercial breaks between songs. The AM and FM world is also in a pickle when it comes to retaining its top talent. Even the juiciest of syndication contracts can't match the $500 million five-year deal that Sirius brokered with Stern. As more of the conventional radio stars see their contracts come up for renewal do you think they will stick around when the XM and Sirius national markets are that much larger and their syndicated reach that much smaller?

Yes, XM and Sirius may have landed 9 million of the most ardent radio fans, but this is really just the beginning. Two months ago, XM was recommended to subscribers of the Rule Breakers ultimate growth newsletter service. If you can't feel the satellite radio revolution rumbling beneath your feet, start reading this again from the first paragraph. If you can't justify the seemingly rich valuations that XM and Sirius presently command, do yourself a favor and envision where satellite radio will be in five, 10 and 15 years until you grasp the potential of the medium, the captive audience and the pricing flexibility of two very powerful companies.

Longtime Fool contributor Rick Munarriz is a Sirius subscriber,but he does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.