Sirius Satellite Radio Inc. (SIRI) isn't growing quite as fast as it thought just a month ago. In fact, it's 200,000 subscribers short of an estimate it gave a few weeks ago. It announced that by the year end 5.9 million to 6.1 million listeners would be tuning in. That was down from 6.3 million forecasted in August of this year. Three weeks ago, the company said it was on track to hit that number. But it won't. Growth isn't happening as quickly as anticipated. 
It's not like listeners are going to the competition. XM Satellite Radio (XMSR) revised its subscriber forecast down several times this year. It's looking for year end subscribers to be between 7.7 million and 7.9 million. That's down from the 9 million it expected at the beginning of the year. Both companies agree there's a softness in the retail market.That's because listeners have more options than they did even 2 years ago. Now they can plug in their iPods or listen to HD [High Definition] Radio while they're driving. Of course, it doesn't help that complaints of transmission problems have increased, as well as others. New subscribers don't see those as selling points.
What seems to be happening here is a limited universe for a market, one that only has so many subscribers. While Satellite and XM are battling it out for those listeners, neither is making money, and both are spending freely for new content or stealing content from the other. As an example, Sirius recently signed Nascar which will move from XM in January. That's not new content.
Howard Stern was signed last year with a lot of fanfare. Sirius hoped it would make all the difference. There's no question many new listeners signed up to hear an unfettered Howard Stern titillate his followers. But that wasn't enough to put profits on the bottom line. And unless these two giants merge [which would have real anti-trust problems], the promise to investors
of profits within some reasonable time frame seems more and more remote. And if the two were to merge, beware of the cost of a subscription because there would be no competition.
Sirius and XM have serious problems, and Howard Stern, NASCAR and college football aren't the fix. It looks like a lot of money was spent wooing a market that is now showing itself to be relatively small. Unless the universe of listeners expands, these two radio giants will continue to battle over the subscribers who are simply looking to get the best deal for listening to commercial free radio.
Ted Allrich - seekingalpha.com
Jazz from Amazon.com
Technorati Tags: Jazz, Smooth Jazz, Music
Are people complaining about Sirius and XM doing all this advertising about commercial free stations, when in fact 90% of the stations on Sirius contain commercials. I contacted Sirius regarding this and their reply (enclosed in part) was that they don’t consider it to be commercials. Where I come from if it waddles like a duck, quacks like a duck…… In their reply Sirius boasts that they have all of 12 stations with no host or ”announcements”. How is it that Sirius can advertise 100 stations with no commercials?
ReplyDeletePlease cover this.
Thank You.
(part of the Sirius babble)
Our emphasis is on the music and entertainment you want. Master music programmers and on-air personalities, who are true experts, host our music. They back up the music with compelling information about the song being played. We do not consider announcements and on-air host discussions ”commercials", we simply want to ensure that our listeners remember who they are listening to so they can come back to their favorite channels and make requests. We apologize for any frustration caused by the announcements and on-air host discussions.
Though many of our subscribers appreciate the on-air hosts on SIRIUS, we do understand that there are subscribers who would rather hear music without DJs. Danny, we\’re happy to point out that we have 12 un-hosted music channels and encourage you to check them out! They are as follows:
Starlite // Ch. 2
SIRIUS Love // Ch. 3
Movin\’ Easy // Ch. 4
The Bridge // Ch. 10
The Coffeehouse // Ch. 30
Chill // Ch. 35
Planet Jazz // Ch. 70
Spa73 // Ch. 73
Kids Stuff // Ch. 116