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Thread: I take issue with Tylers (Spence Osborne) article.

  1. #11
    Sirius Roadkill is offline
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    Quote Originally Posted by john View Post
    Actually just one part of it. I take issue with the part of Tylers (Spence Osborne) article that deals with ARPU. Was the royalty fee included in ARPU yes that is correct.

    1) Is that wrong to do?????

    NO, and I for one was expecting it to happen sooner if not right from the beginning.



    2) Should that take away in anyway from the ARPU number?????

    Once again NO it should not. That number includes what they are getting in average revenue from each subscriber. That includes Fees (especially fees they once were not getting but still paying for on their own).



    3) So is it really important to split it up into different sections and say, opps this part of it went down. Did anyone HERE really do that before????

    Once again NO,



    4) So what makes this different then before????


    I say nothing what so ever, ARPU is ARPU no matter were it comes from.


    Not to be to hard on Tyler, I can see what he was trying to do (by showing SIRIXM was giving more deals to keep subscribers). But really dont they always do that, and yes the ARPU usually gos down when they do. The thing here is that it did not and it went up, which is what I expected it to do long before (because I was always expecting them to include that fee # in the ARPU from the start). So Tyler whats the difference?? ARPU is ARPU no matter were it comes from and if that gives SIRIXM a little more wiggle room to give some extra deals, whats the big deal.
    Yup . . . same discussion I had with Spencer just a few days ago:

    sirius roadkill says:
    May 4, 2010 at 5:38 pm
    ok-ok, but we will have to agree to disagree on this one; revenue is revenue . . why would I exclude any form of revenue from ARPU? I wouldn’t. Nor should the company. The analysts simply missed on this one.

    Secondly, if the company knows that the pass-thru is accretive to the revenue line would that not possibly influence the extent to which retention efforts are increased; the two are not mutually exclusive considerations.

    Reply
    Spencer says:
    May 4, 2010 at 5:45 pm
    I agree that revenue is revenue. The royalty pass-through has, in the past, been withheld because it is pass-through. The company collects it, then pays it out. If the royalty pass-through were 1 million per sub, would you want it clouding ARPU knowing that the money is going right back out the door? This was nothing “missed” by anyone. When they first started the royalty pass-through they specifically kept it out of ARPU for the reasons I stated. This change in direction could not have been anticipated.

    This quarter a metric that would have been a decline now looked positive because of the change they made.

    sirius roadkill says:
    May 4, 2010 at 5:51 pm
    But the problem in holding it out is that you then have no offset to the expensing for that line item, no?

    Isn’t it both a revenue and an expense

    Reply
    Spencer says:
    May 4, 2010 at 6:35 pm
    Yes, it is revenue. Yes, the payment out is an expense. ARPU is not a GAAP metric, and is designed to indicate the revenue that the company is deriving from the subscriber base from which they will potentially make a profit. The royalty is a pass-thru. They will never profit from it.

    I was surprised to see it included in ARPU after they had previously stated it would not be included in the metric.

    Reply
    Spencer says:
    May 4, 2010 at 9:16 pm
    correction….

    I said they will never profit from it…..I do not believe that to be the case. stay tuned

    Reply
    sirius roadkill says:
    May 5, 2010 at 7:49 am
    ok, you have whetted our appetites! do tell . . .

  2. #12
    john is offline
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    Quote Originally Posted by clueless View Post
    ^ +1 ^


    Hey clueless (or maybe I should say Moe) I would not be proud of the company of twits you are getting to defend you.

    listen you dumb twit it looks like you have Larry and Curly coming to defend you.


    Here dumbass I see you still cant explain YOUR OWN statements. So let me give you another chance.
    So now lets put what you said in your first post together with what you just said in your second post and lets see if they make any sense.



    "I think its awesome that no one cares what you think. 19 Hours later and no replies yet. Maybe because no one cares to enter into conversation with you because you are such a dumb-ass twit?"

    and then:


    "My point exactly. Tons of people came to see your post and no one cared."


    Hummmm didn't you first say "no one cares what you think" then (like I first explained to your dumbass) WHY DID THEY BOTHER TO EVEN VIEW IT IN THE FIRST PLACE.


    Explain that Moe.

  3. #13
    john is offline
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    Sirius Roadkill, I still dont agree with Tylers response here:

    "I agree that revenue is revenue. The royalty pass-through has, in the past, been withheld because it is pass-through. The company collects it, then pays it out. If the royalty pass-through were 1 million per sub, would you want it clouding ARPU knowing that the money is going right back out the door? This was nothing “missed” by anyone. When they first started the royalty pass-through they specifically kept it out of ARPU for the reasons I stated. This change in direction could not have been anticipated."


    The reason is, NOT ALL that ARPU will EVER be profitable, even before they included the fee to it. I ask then what about the subsidies they have to give to the OEMS that also will never go to the bottom line and will always have to be paid out. Those are also included into the ARPU and they are even higher (for each OEM sub) then the royalty fee. So that still makes no sense to me and should not for anyone else.

  4. #14
    john is offline
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    This also gets us to many things that are included in ARPU that will never get to the bottom line (or profit from) that are included in the ARPU, yet they are included in the ARPU. I ask what about revenue from the radios yet they have to pay out most of that again for the cost of it, just like the OEMs.


    Also it is important to show especially now because they were paying out before on their own without collecting it and I ask were did that money come from yes it came from the revenue brought in by each subscriber. I think they change what they were doing because they saw it made no sense what so ever to do it the other way when thats been exactly what they were doing before with all the other cost like OEM subsidies.


    The final point is, ask yourself these simple logical common sense questions. How low would ARPU REALLY be if they did not include the 5 dollars they pay GM or the 3 dollars they pay Ford for each sub that they have with them?? That revenue comes in and also gos right out (well maybe not right out) to pay the OEMs. Next, is what really is the difference between the two??? Nothing really unless you what to really split hairs on a nuclear level.
    Last edited by john; 05-07-2010 at 05:56 PM.

  5. #15
    candleman is offline
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    Quote Originally Posted by Havakasha View Post
    Amen brother!
    He is an amazing kid, that's for sure!

  6. #16
    Spencer Osborne is offline
    Quote Originally Posted by john View Post
    Sirius Roadkill, I still dont agree with Tylers response here:

    "I agree that revenue is revenue. The royalty pass-through has, in the past, been withheld because it is pass-through. The company collects it, then pays it out. If the royalty pass-through were 1 million per sub, would you want it clouding ARPU knowing that the money is going right back out the door? This was nothing “missed” by anyone. When they first started the royalty pass-through they specifically kept it out of ARPU for the reasons I stated. This change in direction could not have been anticipated."


    The reason is, NOT ALL that ARPU will EVER be profitable, even before they included the fee to it. I ask then what about the subsidies they have to give to the OEMS that also will never go to the bottom line and will always have to be paid out. Those are also included into the ARPU and they are even higher (for each OEM sub) then the royalty fee. So that still makes no sense to me and should not for anyone else.
    Subsidies paid to OEMs ARE NOT in ARPU. They Are in SAC

  7. #17
    john is offline
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    Quote Originally Posted by Spencer Osborne View Post
    Subsidies paid to OEMs ARE NOT in ARPU. They Are in SAC

    Tyler I am talking about the subsidies the OEMs get every month for each subscriber long after the radio is in and that subsidy has been paid, not the subsidies they get just to put the radios in the cars. Now while the word "subsidy" may not have been the best word used it is all the same.

    You will see I edited my last post to show more clearly what I ment but you had your post up before I was finished. So I can understand the confusion there. So the question is what about those DARE I say it "subsidies" that the OEMs get each month (5 for GM and 3 for Ford).
    Last edited by john; 05-07-2010 at 06:07 PM.

  8. #18
    clueless is offline
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    Quote Originally Posted by john View Post
    Hey clueless (or maybe I should say Moe) I would not be proud of the company of twits you are getting to defend you.

    listen you dumb twit it looks like you have Larry and Curly coming to defend you.


    Here dumbass I see you still cant explain YOUR OWN statements. So let me give you another chance.
    So now lets put what you said in your first post together with what you just said in your second post and lets see if they make any sense.



    "I think its awesome that no one cares what you think. 19 Hours later and no replies yet. Maybe because no one cares to enter into conversation with you because you are such a dumb-ass twit?"

    and then:


    "My point exactly. Tons of people came to see your post and no one cared."


    Hummmm didn't you first say "no one cares what you think" then (like I first explained to your dumbass) WHY DID THEY BOTHER TO EVEN VIEW IT IN THE FIRST PLACE.


    Explain that Moe.
    You're an idiot. It's awesome that you don't know it.

  9. #19
    john is offline
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    Quote Originally Posted by clueless View Post
    You're an idiot. It's awesome that you don't know it.
    You see why I call you guys dumbasses and twits because only a dumbass would come here and try to say that after I just destroyed him in this thread. I know from your last post you dont think so. So then please why have you still not given a reason to the links and then explain the total contradiction in your first two statements. I have been waiting. Ho also I guess SRK and Tyler responding to me in your twitish mind doesn't totally put your arguement 6 feet under, does it. What a twit.

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