Anyone invested in satellite radio knows how important OEM subscribers are to the subscriber count, and in theory, the bottom line. The OEM channel offers more exposure for SDARS than any other outlet. Now, the two auto manufacturers that have the most lucrative OEM contracts with Sirius XM are about to get yet another bailout as the race to restructure their business.
The initial restructuring plans of both GM and Chrysler were rejected by the government. The companies have tried to maintain a status quo in means and methods of business. For their part, the government at least was able to recognize that the status quo would not work. Now, with a $5 Billion dollar carrot hanging out there, perhaps new restructuring plans will come to fruition.
Whether the sweeping changes in the OEM landscape that some expect will have a dramatic impact on SDARS is yet to be seen, but certainly Sirius XM should be making contingency plans with all OEM partners at this point, as it appears that GM can not remain the biggest and restructure at the same time. This will leave a SDARS void for others to fill. Perhaps Ford, which has not taken government money will step up in a way that will keep the SDARS installs at a level where they make sense.
Position - Long Sirius XM, No Position OEM's