A Satellite Radio Giant's Surprising Small Audience

by: Jeff Bercovici July 30, 2008 | about stocks: SIRI    
Jeff Bercovici

Jeff Bercovici

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So now that Sirius and XM have merged, nothing can stop them from becoming a world-dominating satellite hegemon, right?

Well, maybe one thing: They still don't seem to have a hell of a lot of listenership. At least Sirius doesn't. As Silicon Alley Insider pointed out yesterday, Sirius reported greatly slowed growth in its subscriber acquisitions in the second quarter. Nearly 90 percent of those subscribers it did acquire got their subscriptions as part of a new car purchase. In other words, they're Sirius customers in the same sense that they're anti-lock brakes customers.

And there's reason to think those subscribers aren't using their Sirius tuners as much as you might think -- not to listen to some of its putatively more high-profile programming, at any rate. The company doesn't release public ratings figures for its channels or shows, and I was somewhat shocked to learn, from a Sirius insider, that it didn't even have internal audience data until quite recently -- just a few months ago.

Among other things, the new data showed that Sirius Stars -- the talk channel featuring Barbara Walters, Deepak Chopra, Candace Bushnell and other well-known hosts -- attracted fewer than 30,000 listeners in a week. Assuming that number wasn't an absolute fluke, it seems likely Sirius will see fit to reevaluate its talent roster in the near future with an eye toward who is -- and isn't -- paying the bills.

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This article has 55 comments:

  •  
    Jul 30 03:22 AM
    be patient. the merger was just finalized. everything will be attended to based on importance and at the right time. the company is probably prioritizing all these things right now.
    Reply | Link to Comment
  •  
    Jul 30 06:17 AM
    your analogy is ludicrous--equating satrad in cars as the equivalancy to brakes shows your level of understanding to be as sharp as a brake pad--radios in cars, whether satrad or terrestrial have been mainstays for the last 50 years-- wouldn't any standard equipment in a car fit your analogy? what a boob--makes statements without having the guts to reveal his sirius insider"source&qu... you are shorting the stock or lobbying for the NAB--what a boob
    Reply | Link to Comment
  •  
    Jul 30 06:50 AM
    Wow, that was a poorly written cheapshot article. Your sight has a feature to add you to my watchlist, but now I would like to suggest you also add a feature to Ignore any further articles an auther ever composes.
    Reply | Link to Comment
  •  
    Jul 30 06:52 AM
    Please add ignore feature for an Author's work
    Reply | Link to Comment
  •  
    Jul 30 07:00 AM
    This only means that there is a lot of upside to this stock, Because while the shares my be diluted, the market for satellite radio isn't. That being said, we are now on are way to the holiday season and sales should pick up. If you own sirius xm, I would stop looking at it everyday and sell in "May go away".
    Reply | Link to Comment
  •  
    Jul 30 07:04 AM
    Great post statik! When did this "sputnik" come crashing down on us? First of all, since when has 18.5 million listeners been considered a small audience?.....By what standard?.....And why do you think sub numbers are a little thin?.......Gee, could it possibly be related to slumping auto sales and our economic crisis? I guess since auto sales are down substantially, that must mean consumers are simply not interested in vehicles anymore. Would you like to buy a clue Jeff? (It's the economy, stupid). And what about this concept Jeffy - do you think the long delay in merger approval may have exacerbated the problem SatRad is experiencing? You got any "in depth" analysis on that? Now get on outa here with your alleycat coat, wearing Hush Puppy shoes........cuz you're dismissed!!!

    PS - Say "hi" to your inside source for me, ok?
    Reply | Link to Comment
  •  
    Jul 30 07:48 AM
    Jeff, I have to tell you, you make it too obvious that either someone is pulling your strings or you appear to be shorting this stock. I know insider information about my own corporation and the LAST person that I would give information too would be someone who would attack me in an article. Just plain ole common sense. I agree with the others, please add an ignore author button so that I don't have to totally quit looking at Seeking Alpha articles.
    Reply | Link to Comment
  •  
    Jul 30 08:21 AM
    What a short sighted article. do you realize the 17 month FCC wait has almost destroyed these companies? The number of people on the sidelines is astounding. Who PAID you to write this....just another PAID basher...I will not stand for this....SEEKING ALPHA...do you have any standards????????? SIRIUS INSIDER INDEED...WHAT A HACK.
    Reply | Link to Comment
  •  
    Jul 30 08:24 AM
    18 million subscribers divided by roughly 300 channels today equals 60,000 listeners per channel. That is assuming all the channels get equal listenership which of course they don't. 1. The argument that subscriptions are down is BECAUSE OF THE PENDING MERGER FOR OVER A YEAR!!!. Lots of olks on the sidelines. Once the portable radios are combined amd other hardware technology is available, do you really think that those numbers will not start to climb? 2. Can you also give us the point that people don't pay an extra monthly subscription fee for those brakes? 3. Lastly, your readership as compared to your analysis can be pointed back to you for illustrative purposes. For example, the internet has millions upon millions of surfers, how many do you think actually read and care about your article? I only see that 8 of us cared to comment so far. Sounds like based on your argument, your subscriptions are falling too!
    Reply | Link to Comment
  •  
    Jul 30 08:34 AM
    18 million subscribers places them 2nd in the World for media provider subscriptions.... The only company with more subscribers is Comcast. I get what you were trying to say; that not all subscribers are listeners, but using stats on how many people tuned in to Sirius Stars as a gauge is an obvious attempt at magnifying your point... a cheap trick! I Siriously (I know) doubt that the percentage of non-listening subscribers is very large, certainly not large enough to warrant an article. Perhaps you are trying to slant public opinion, but I'm guessing you just got an idea and ran with it without really thinking it out.
    Reply | Link to Comment
  •  
    Jul 30 08:35 AM
    There have been several articles written on the merger, but, this is without doubt the worst article on the subject yet. The author obviously has a hidden agenda. Jeff, you may want to stop writing and cover your shorts.
    Reply | Link to Comment
  •  
    Jul 30 08:36 AM
    Your quote and main topic of the article: "They still don't seem to have a hell of a lot of listenership." What about the 18 moiilion folks that are forking out money each month? They are listening to something, right? So, overall, the idea must be a good enough idea for people to PAY MONEY EACH MONTH. Sure somoe channels can and will be removed, so what, that a smart company looking at its products and making adjustments. But a brake owner by way of buying a car versus a satellie radio subscriber who has chosen to continue to pay does not make any sense to me.
    Reply | Link to Comment
  •  
    Jul 30 08:42 AM
    Sales are down because of people like me. I just bought a used car when i sold my old car my sat radio went with it. im now waiting to buy a sat radio to make sure i can get all of the combined companies stations. Theres plenty of people like me im sure. Subs. are gonna explode once this co. gets on there feet!
    Reply | Link to Comment
  •  
    Jul 30 08:44 AM
    I myself have been waiting for interoperable radios. That will be comming soon. I am sure that is why retail sales have been down. Guess what NAB booy. I will be buying 2.
    Reply | Link to Comment
  •  
    Jul 30 08:58 AM
    Wow, you are so ignorant, and a complete idiot. 18 million subscribers is not a lot huh? That's 18 million PAYING subscriptions, it's not like they are the 3-month trial. You are a complete moron, go kill yourself.
    Reply | Link to Comment
  •  
    Jul 30 09:00 AM
    I love it when I read these articles from these authors who know it all. I really enjoy the fact that there are so many posts from readers giving valuable opinions and really pointing out how people like Jeff have some motive for making satellite radio sound like a failure. This article is so flawed. I wonder if he ever even used a satellite radio. Anyone who has, certainly can't dispute how entertaining it is. Well, anyway I think about 3 years ago there was a combined subscriber base of about 3.5 million, up to over 18 million now, that must be poor growth according to Jeff. Let us know when you have 18 million people reading your ridiculous articles.
    Reply | Link to Comment
  •  
    Jul 30 09:02 AM
    the antilock brake companies are doing very well
    Reply | Link to Comment
  •  
    Jul 30 09:07 AM
    Siri/Xm may have some difficulties , but the future looks a helluva lot brighter to me now ......satrad has definately tested my patience , but I think it is going to pay off in the not too distant future , and if they expand globally ....oh my , I am lickin' my chops just thinking about it !!!!
    Reply | Link to Comment
  •  
    Jul 30 09:30 AM
    It makes no sense to own these shares anymore. The combined company needs to refinance a huge portion of its $3+ billion in debt, and the company is going to do what it takes to make bondholders whole, even if it means breaking the backs of gullible sports-fan mentality equity holders such as yourselves. The convertible bonds just issued will pay their holders more than 6% a year, then they get all the upside if the stock ever recovers (which it won’t). With that kind of a coupon, it’s meaningless to own the common shares.
    Those of you who bought high have my sympathies.

    It’s not too late, however. If you sell now, maybe you can take what pennies you have left and buy convertibles or an index fund. At least you’ll stand a chance of making yourselves whole again someday. Good luck, it’s a painful lesson. There are too many other investment opportunities out there with more favorable risk-reward profiles than to commit my funds to the flimsy and unsubstantiated hope that these money-losing companies' stocks will someday spike.
    Reply | Link to Comment
  •  
    Jul 30 09:48 AM
    VV-uare so full of shit-u keep posting the same bs every chance u get . Why don't u try and get a life...
    Reply | Link to Comment
  •  
    Jul 30 09:52 AM
    Hey Vic Did you copy and paste, cause I know you said that on another article ...oh yeah yesterday. Come on you are not saying anything we don't know,but we unlike you see the potential of this new entity.
    We aren't looking for amazing numbers right now it is going to take a while for the new receivers to hit the market.
    With oil going lower over the next couple of months that will have an impact on the new car market.
    Things take time only panic is immediate.
    I am sure with the 17 months they looked at financing a couple of times,this wasn't a shoot from the hip plan.
    As too this article,and I use that term loosly, the beauty of SATRAD is that it appeals to everybody not only to the hit parade..
    Reply | Link to Comment
  •  
    Jul 30 10:13 AM
    Just you wait until the dual subscribers turn off their second radios.
    You're going to see 12 million subscribers at the best possible scenario.
    Reply | Link to Comment
  •  
    Jul 30 10:20 AM
    hey now-

    Mel & Howard had a great conversations today. Mel made a statement that supported the stinkaroo Comcast comment above. The interview also outlined the naivity of Congress about business.

    Bottom line: The combined company is stable, and subscribers base is climbing!


    PS.
    Vicar - If you're so negative about the stock, get out. If you're shorting, get out! It's price not going to get much lower. If you're bitter because you're all-in and need the cash now, HA HA!!! Remember the IRS does allow losses to be deferred against gains. Seeing how pessimistic you are, I'm sure you made a mint in the financial funds, by shorting.
    Reply | Link to Comment
  •  
    Jul 30 10:25 AM
    All I can say is I agree with all the critics regarding this article. The only one who I feel makes sense in his reporting is Tyler. Hold on to your Sirius/XM stock. Many of us have waited for a long time and I say give it a little more time. The stock will eventually take off on the upside.
    Reply | Link to Comment
  •  
    Jul 30 10:41 AM
    He raises a couple of points that I think that Sirius realizes. Do you know anyone who listens to Operah? Barbara Walters? How much was paid for that talent? I think that Sirius needs to pay attention to what they pay for and take some ratings guidelines for content and consider cancelling shows/talent that is unprofitable and adding stuff that will really keep and add more subscribers. Rush Limbaugh (while he is controversial) would be the mother lode. He has 30 million listeners a day. Of course, he would cost a ton and just signed a new long term deal with clear channel.
    Reply | Link to Comment
  •  
    Jul 30 11:24 AM
    Very misleading. Compare it to cable TV and perhaps you won't be so shocked. CNBC's Business Day is averaging 83,000 adults 25-54 for 2007, up 32% over 2006 (63,000). In total viewers, Business Day is up 21% from 210,000 last year to 254,000 this year, with its best year since 2002. Now those are small numbers. When Seinfeld went off the air it was averaging 20 million viewers.
    Reply | Link to Comment
  •  
    Jul 30 11:25 AM
    18 million subscribers is as many or more as the "biggest MMORPG of all time" World of Warcraft. It has made millions to billions for the company.

    This is not a small company. It is now the second largest paid subscription company, how is that small? Get the stick out of your ass and get a clue.

    People who were afraid to choose a company can now get the radio they have been waiting for. And the few million die hard sat fans will buy new radios to get the duo programing.

    Not to mention that they are saving 400 million a month now and at least 1-2 million will bump their subscriptions up 4 dollars to get the duo programing. That amounts to another 4-8 million dollars in increased venue A MONTH or 48-96 million dollars a YEAR. This is by no feat a small number.

    +500 million in the pocket of the company will allow them to pay down debt and increase their stock value attracting new investors. HOW ABOUT WAITING A MONTH OR TWO TO GIVE YOUR RATS ASS COMMENTS ON THE ISSUE.

    i only found this horrible article in a stock trading page. But it seems you have about........50 readers. Grats on your "success"
    Reply | Link to Comment
  •  
    Jul 30 11:58 AM
    Another NAB shill heard from. You guys lost...cover your short sales and get over it.
    Reply | Link to Comment
  •  
    Jul 30 12:08 PM
    There will be a day in the future where almost every car in America will have Sat/Rad.
    Reply | Link to Comment
  •  
    Jul 30 01:16 PM
    Not only am I a Sirius subscriber, I'm a an exclusive listener. That means that since I've had Sirius, I've listened to ZERO minutes of terrestrial radio. NONE! In fact, everyone I know who has satellite radio is the same, avoiding commercial-laden radio as much as possible. Your date is wrong, if someone listens, they keep it. Let me guess, you've been paid off by Clear Channel.
    Reply | Link to Comment
  •  
    Jul 30 02:10 PM
    Bababooie !!!!!
    Reply | Link to Comment
  •  
    Jul 30 03:23 PM
    I'M WAITING FOR INTEROPERABLE RADIOS TOO. THEN I WILL GET 6 FOR MY CARS AND AS CHRISTMAS PRESENTS FOR THE KIDS.
    Reply | Link to Comment
  •  
    Jul 30 04:07 PM
    300M population in the U.S.-18M current SAT/RAD Subs = 282 MILLION POTENTIAL SAT/RAD SUBSCRIBERS. SIRIUS XM is already #2 as a radio service with huge growth potential. It may take years for profitability to be reached (which may not be a good play for traders). Let's not forget about other areas of the market such as TV and GARMIN. I would not rule out a deal with the APPLE IPOD.
    Reply | Link to Comment
  •  
    Jul 30 04:11 PM
    EVERY CAR IN AMERICA!!
    Reply | Link to Comment
  •  
    Jul 30 04:12 PM
    vicar...i guess you'd argue that NOT getting the refi and losing access to the cash in the short-term was the better of the two options? you think the stock looks bad now, how about if the merger got scuttled because they couldn't refi the debt?

    the fact that they could get someone to sell them debt speaks volumes. you think any old business is having money handed to it, even at these rates?

    btw, you know what rate mel got on the debt he took out when he started infiniti? take a guess...ah forget it, i'll let you in...it was 21%.

    when you put it in context it's not that big a deal...sure, would you have LOVED for it to be cheaper? who wouldn't...but when faced with NOT finalizing the merge because you couldn't even find bookmaker's rates, then i'd take this any day & twice on sundays.

    the size of this su