I guess we are getting old socal . . . back in our day, a prolonged dry spell could be cured with a VCR and some Hyapatia Lee . . . today's kids break the drought with CNBC and Melissa Lee.
Printable View
"Sirius just announced a price increase, and it's unclear how quickly it's going to roll through to the entire sub-base. They are also experimenting more with the used car market. So there are a lot of interesting developments there. I think the penetration is still low enough such that they probably have less macro risk. If you're one of the 20-million-some-odd subscribers to Sirius, you probably aren't going to churn because it's a choice of buying Sirius or buying food or gas or something. You're still a relative early adopter, and you're probably skewed more toward the middle or upper classes. I think we'll be looking at potential capital allocation there as the company starts to delever."
David Bank, RBC Capital Markets
http://www.twst.com/yagoo/davidbank1.html
"Sirius XM’s (NASDAQ:SIRI) stock hasn’t recovered much since the S&P 500 dip in August 2011 due to concerns around the worsening economy in the U.S. and Europe. In October, the stock showed some signs of recovery, but dropped by more than 5% followed by the company’s earnings announcement on Tuesday as a result of lower than expected subscriber gains. We maintain our price estimate for Sirius XM at $2.11, implying a premium of close to 20% to the market price. We think that the business model for the company is intact, and that partnerships with big automotive companies such as GM (NYSE:GM) and Toyota (NYSE:TM) will go a long way."
http://www.trefis.com/stock/siri/art...-11/2011-11-03
in case Spencer deletes my post on the main news page:
Spencer says:
November 4, 2011 at 2:43 pm
Birdhouse….
Okay,. I stole away a few minutes to give you a proper response.
This article was not misleading at all. In fact, it gets to the heart of the matter with acual numbers.
You see, while the churn rate may remain the same, the absolute numer is rising. It is the absolute numbers we need to deal with. I can make percentages say anything I want.
Q2 2011
Gross additions 2,179,348
Churn – 1,727,201
Q3 2011
Gross additions 2,138,131
Churn – 1,804,448
You see what is happening here? Gross additions went down while churn went up. If you simply follow percentages you would would be missing that picture.
next quarter churn will approach 1,900,000. With auto sales being weaker, and gross additions not growing as fast, it becomes very imp[ortant for Sirius XM to garner more gross subscribers. This can be accomplished by:
1. More car sales – not likely
2. Higher penetration rate – not likely
3. A ramped up used car program – in the works
4. Better retail – in the works
Trefis is simply quoting Sirius XM and ignoring the fact that “retention” and “win-back” programs are code words for SELLING OUR PRODUCT CHEAPER. You will see that if you look at the ARPU line. Winning back subs is fine, but there is a cost to doing it.
A take rate of 44.7% may seem impressive, but you need to remember that KEEPING subscribers is how the company makes money. 24% churn out each year. Winning 100 subs, but losing 85 is the reality. The sub growth is much more modest than people realize, and a dipping conversion rate makes that qynamic change greatly.
In Q2 the situation was win 100 subs lose 80. Do you see the difference.
What happens if we lose another half point on take rate combined with lower OEM sales and churn remaining stabnle at 1.9%? Think about that
sirius roadkill says:
November 4, 2011 at 7:34 pm
“We are not seeing any change in conversion that concerns us about how customers feel about our product. Conversion of the same vehicle models are basically the same. What changes every quarter is the mix of OEMs and the mix within OEMs, as all models convert at different levels.”
Mel Karmazin
November 1, 2011
http://money.msn.com/business-.....d=14465758
Spencer says:
November 4, 2011 at 2:25 pm
You missed the entire point of the article. You need to look at the absolute numbers
Reply
sirius roadkill says:
November 4, 2011 at 7:32 pm
” — on our second quarter earnings call, we raised our subscriber guidance for the year to 1.6 million net adds, which we expect to meet. This means, we anticipate adding about 440,000 net subscribers in the fourth quarter, up about 34% from subscriber growth in the fourth quarter of 2010.
Self-pay subscriber performance in the third quarter was excellent. We grew our self-pay subscriber base by 364,000 subs to an all-time new third quarter record. These third quarter self-pay net adds were up 41% from third quarter of last year, and represented the best single quarter since we completed the merger of SiriusXM in the summer of 2008.”
Mel Karmazin
November 1, 2011
http://money.msn.com/business-.....d=14465758
Growing EBITDA is really a precursor to driving free cash flow, which we believe is the primary driver of SiriusXM's value.
Mel Karmazin
November 1, 2011
Mel Karmazin
November 1, 2011
" . . . on our second quarter earnings call, we raised our subscriber guidance for the year to 1.6 million net adds, which we expect to meet. This means, we anticipate adding about 440,000 net subscribers in the fourth quarter."
Official September Auto Sales Have Sirius Impact
October 4, 2011 (12:54 am) Spencer Osborne
"I feel that Sirius XM’s guidance of 1.6 million new subscribers in 2011 is very safe."
October 2011 Auto Sales – Mixed Bag For Sirius XM
November 3, 2011 (9:35 pm) Spencer Osborne
"As of right now Q4 has started off weaker than Q2 and Q3. This will apply more pressure on the company to meet their 2011 subscriber guidance of 1.6 million."
Japanese Earthquake Impact on Auto Sector Quantified
April 18, 2011 (8:00 am) Spencer Osborne
The March 11, 2011 earthquake and Tsunami that devastated Japan is something that will take the country years to recover from. Even today, over a month later, we are seeing headlines relating to the subject. As sad as these events are, we must look at the potential impacts that they could have here in the United States, and in particular as it relates to the auto sector.
The auto sector provides Sirius XM Satellite Radio (NASDAQ:SIRI) with the vast majority of their subscriber base. It is through the auto sector that most consumers first experience satellite radio with promotional trials ranging from 3 months to a year. Over the past few weeks we here at SiriusBuzz have kept readers informed on the potential impacts. We stated early on that the impacts would be small ripples readily absorbed by the company and that the effects would take at least six months to fully pan out. We still maintain that stance today.
Official September Auto Sales Have Sirius Impact
October 4, 2011 (12:54 am) Spencer Osborne
The real Sirius XM story in Q3 auto sales actually happened in Q1. It was March of 2011 that an earthquake and Tsunami struck Japan. At the time I predicted that the impact would have a ripple effect that would play out over the following two quarters.
Auto Sales – Mixed Bag For Sirius XM
November 3, 2011 (9:35 pm) Spencer Osborne
The first thing to understand is that the auto sector is finally getting to a point of full recovery after the March Earthquake and Tsunami disaster in Japan, but, despite that, the tenor of the auto sales market is not quite what analysts had hoped for. Simply stated, auto sales are not climbing at a pace that gives Sirius XM the opportunity to deliver growth numbers that impress the street.
What do David Bank & Spencer Osborne have in common?
One man runs around writing about a big SAC . . . the other man runs around writing about a mixed bag.
Remember back when people actually came here to chat and share ideas? Those were the days.
13 days of crickets.