Quote Originally Posted by MUSCLE13 View Post
Spencer writes

Whether or not these services make money is not really the issue. The fact that they exist and can bring in consumers is why we need to monitor them.

Then a poster answers him, sxminvestor, talking about fragmentation. I guess he is probably reading my posts here. The real answer to Spencer on this point is he has been so gung-ho on Sirius competing full force on the internet. Practically berating them for not taking on Pandora with a similar offering (I am guessing 2.0 has some personalization), but in the same vein Spencer is missing one key point in his thesis. Nobody is making big money on internet radio. NOBODY IN 17 YEARS. Pandora has 80 million registered users and they aren't projecting profits yet either in their S-1. And the flood of competition is coming.

Spencer wants Sirius to go full force into the net when that part of the radio business doesn't make money. So basically if they followed that advice and put big resources into getting a big part of the consumer base to the net instead of sat, Sirius would drastically lower margins and be competing hard in a space with 0 barrier to entry. They would be 1 out of hundreds of thousands. With sat they are 100% of the space. Their EBITDA margins would beg for a lower stock price. Net radio for Sirius is a nice churn reducer. Maybe some added ARPU too for the sat sub base too. Its not a good business and Spencer's thesis is flawed.

Pittman called Pandora a feature instead of a business yesterday in the article. Does a person following this business think that a feature is what Sirius should be? Sirius is a cash flow business. Internet add-ons are nice. Thats all they are. Prove to us that this is a business Spencer when you guys can't name one internet radio company that has made it a cash flow machine. Do you invest on hope or EBITDA?
Hey Muscle,
Yes, I have echoed some of your thoughts, learned a lot from you listening to you on Playground site. Your EBIDTA growth estimate projections for Sirius is one of the main reasons I did not get scared out of the stock thinking it was toppy at one time only because I was not experienced like you with radio and media.

Sorry if I parroted you a bit but you are 100% right on and I am curious if you have revised your estimates for year end price target based on EBIDTA growth. I think you were at around 2.56 if I'm not mistaken.