Toyota Rolls Out 2009 Corolla – XM Featured
If you surf the net, or read this site you will see that Toyota has launched a new on line advertising campaign featuring the all new 2009 Corolla. Toyota has given the Corolla a new richer styling, and the advertising is quick to point that out. The Corolla has long been seen as an entry level car, but these days, entry level cars can include amenities such as satellite radio and navigation. Given the price of gas, a car such as the new Corolla is sure to be a big seller.
For satellite radio watchers, the new Corolla will not disappoint. Both Sirius and XM are available. Toyota puts marketing push behind XM in both the on line Google ads, as well as on their tour of the Corolla, but those that want Sirius can get it as it is a listed option on the car.
With uncertainties in the auto sales world for 2008 predicted by many, consumer value will be a big factor in car purchases. Consumer value is no longer just about price, it is what you get for your money, and this ad campaign by Toyota gives consumers a clear picture of all they they can get for a reasonable price.
Go ahead, check out the new Corolla on Toyota’s website. Even if it is not a car that you would consider, the richness of the ad campaign is worth seeing.
Position – Long Sirius, Long XM
The big question is whether Sirius will be available at all in this vehicle. It is important because it will provide some indication as to whether Sirius has any role at all (even though the coveted factory install is clearly an XM-only proposition) with Toyota.
I thought the article answered your question pretty clearly. The following paragraph gives you the information you are seeking:
“For satellite radio watchers, the new Corolla will not disappoint. Both Sirius and XM are available. Toyota puts marketing push behind XM in both the on line Google ads, as well as on their tour of the Corolla, but those that want Sirius can get it as it is a listed option on the car.”
If that is not enough for you you can always do the following:
1. Go to this link on the corporate Toyota website – http://www.toyota.com/corolla/.....l?exp=true
2. Put your mouse to the right of the screen.
3. There is a fountain there. Put your mouse on the fountain and a banner saying “AUDIO” will appear. Click it.
4. You now have the picture of the fountain, a 2009 Corolla, and two framed boxes on the left. The upper box is a video about the audio systems. Click it
5. A brief video will play. It is an interesting black and white movie clip. As steated, the marketing pushes XM.
6. On the right side of the screen there are text desciptions of the services. The second description states “Satellite Radio Capable” with a “[3] and a “[6}”.
7. Th “[3}” tells you the Corolla models in which satellite radio is available.
8. The “[6]” states, “Satellite radio requires XM- or Sirius-compatible receiver and monthly service fee. See your Toyota dealer for further details. Reception of the satellite signal may vary depending on location. All fees and programming subject to change. Subscriptions subject to the terms and conditions available at http://www.xmradio.com or http://www.sirius.com. Available only in the 48 contiguous United States.”
If that is not good enough
1. Go to this link on the corporate Toyota website – http://www.toyota.com/corolla/.....index.html
2. At the top of the screen there is a bar called research. Click it and a dropdwon menu will appear. Click accessories.
3. A menue of accessories opens up. The accessories include Sirius as well as XM
4. You can tke a shortcut by clicking this link to see 2009 Corolla accessories, again from the corporate Toyota website – http://www.toyota.com/corolla/.....ories.html
To avoid any future confusion these links are also available (all from the Toyota corporate website)
2008 Avalon – Siriusand XM – http://www.toyota.com/avalon/a.....ories.html
2009 Camry – Sirius and XM – http://www.toyota.com/camry/ac.....ories.html
2008 Camry Solara – Sirius and XM – http://www.toyota.com/camrysol.....ories.html
2009 Matrix – Sirius and XM – http://www.toyota.com/matrix/a.....ories.html
2008 Prius – Sirius or XM – http://www.toyota.com/prius-hy.....ories.html
2008 Yaris – neither
2008 Tacoma – Neither
2008 Tundra – Sirius or XM – http://www.toyota.com/tundra/a.....ories.html
2008 FourRunner – Sirius or XM – http://www.toyota.com/4runner/.....ories.html
2008 FJ Cruiser – Sirius or XM – http://www.toyota.com/fjcruise.....ories.html
2008 Highlander – Sirius or XM – http://www.toyota.com/highland.....ories.html
2008 Land Cruiser – XM – http://www.toyota.com/landcrui.....ories.html
2008 Rav4 – XM – http://www.toyota.com/rav4/acc.....ories.html
2008 Sequoia – Sirius – http://www.toyota.com/sequoia/.....ories.html
2008 Sienna – sirius or XM – http://www.toyota.com/sienna/a.....ories.html
I think the consumer having their choice is a wonderful thing.
Okay, I missed it.
Does that mean you get to keep claiming Toyota is a 50/50 split through ’09, even though we know that factory installs are more effective than dealer installs?
First of all I dont remember him saying that, and I’ve been reading his articles for some time now. The only place he even comes close to something like that is in the car sales to date with their partnerships with sat. radio. The only conclusion he draws (in my humble opinion) is that when anaylist say XMSR has 60% of the OEM deals that is is a little bit off, because of the amount of duel deals auto companies have with XMSR, too also install SIRI at the dealer level compared to SIRI exclusive deals to only install their radios factory or dealer.
To clarify….
The Auto Sales Reports with SDARS relationships is exactatly what the various deals entail.
The amount of cars sold is not indicative of the number of satellite radio sales, and because of the varied levels of satellite radio installations, a deal, in terms of SDARS may be very meaningful or meaningless.
The percentages break down the OOEM, and who they have installation deals with. It does not even get into how many subscribers are generated by each OEM.
The key is what these respective companies have access to. With Toyota both Sirius and XM have access. In particular, with Toyota, port installations are an important factor. Many components of Toyota cars are port installed.
As long as the consumer has a choice, I am happy, because in my opinion that is how it should be. I have never been a fan of the exclusive deals. i have no problem with marketing deals where a company pushes one over the other. This is what is happening with Toyota….but at least the customer or dealership can decide.
Tyler I understand that, and what I was saying is where did FrontMed get the idea that you have ever said Toyota is a 50/50 split between the two satelite companies. FrontMed being FrontMed, I had to give the only example out there were you even remotely come close to that.
john…
the clarification was for other readers. I understood what you were saying.
When someone says that XM has deals with OEM’s that represent 60% of the market, it implies that sirius must have only 40%. As we all know, this is not the case.
As you know, but other may not,The point of the auto articles is to:
1. Show auto sales of the oem’s because it is important to SDARS.
2. Show the relationships between the OEM’s and the SDARS companies.
>>> When someone says that XM has deals with OEM’s that represent 60% of the market, it implies that sirius must have only 40%. As we all know, this is not the case.
You’re right, it does not mean that. In this case, Sirius paid through the nose to get a PIO deal, first with Penske, then with one of the Toyota importers. That is, paid to get the ports to remove a higher-functioning XM unit and replace it with a lesser functioning Sirius unit on some specially-ordered cars.
So, Sirius does end up with some very expensive table scraps for now. But ultimately, Toyota is likely to end up locking Sirius out just as have all the other Japanese OEMs.
BTW, have you removed Sirius from your Nissan/Infiniti #s yet? Or are you still figuring there may be a Sirius unit out there somewhere in an ’07 (amongst a literal flood of XM factory installs).
Once again, you take exception with the fact that Sirius has a relationship with Toyota. That is fine, you can take exception with that. It does not however change the fact that Toyota Motors has themselves indicated their relationship with Sirius.
The Sirius deal with Panske was not removing equipment to install other equipment. It simply is not the case. A Toyota dealer can order cars however they want. Many components are port installed. The capabilities of the radios are what they are. They tune into the stations of the provider.
If you want to call it “table scraps” you can do so, but you once again having nothing indicating the level of install breakdown in Toyota between Sirius and XM. I will say that Toyotas marketing push for XM does indeed give an advantage to XM. This would be quite obvious.
A flood of installs by Nissan has not really materialized as yet. XM’s OEM gross subscriber numbers simply do not show a flood, unless the staple contributor, GM, is doing less installs and Nissan is making up the diff. Go to this link and look at the inventory to see how many come equipped with satellite.
http://tinyurl.com/39wdnr
Sirius still seems to be working with and available to consumers in Nissan models, but Nissan is making no real efforts to make that known.
As for the Japanese markety “locking out Sirius”.
Honda – XM
Mazda – Sirius
Nissan – Both with factory install XM port/dealer Sirius
Subaru – Both
Toyota – Both with factory XM port/dealer Sirius.
Again, it is installations that turn into self paying subscribers that matters.
Persoannly, I like the consumer having the ability to make their own choice. I always have.
>>> Nissan – Both with factory install XM port/dealer Sirius
Nissans and Infinitis are now XM exclusive, Infinitis are XM standard, and you cannot get Sirius in an ’08 Nissan or Infiniti. Your remark is once again, a misrepresentation. To suggest that Nissan is “both” because there may still be a few ’07s out there is really stretching the truth.
Of course we don’t know the split between XM/SIRI on the Toyotas. But obviously, the XM numbers are much better than SIRI’s. Just go look at what is on dealer lots. As receiver integration moves forward, Sirius will disappear altogether from Toyota (I thought it would happen by now, but clearly, SIRI has one more year on the deal).
My beef with your numbers is that you intentionally try to make it as though Sirius has more strength in the OEM deals than they really do. As someone else pointed out to me, SIRI is paying enough money to this distributor to make them willing to remove an XM unit and replace it with a Sirius unit that eliminates the traffic (and soon, weather) functionality — that suggests just how desperate they are to keep half a foot in the door with Toyota. At any rate, the number of SIRI Port Installs is small compared to the number of XM factory installs, and I believe you know that.
I have stated that I have expected Nissan to go exclusive and remove Sirius altogether from an offering. However, even as of today, you can still get dealer installs at Nissan with relative ease. Call Nissan your self and simply ask the question. Sirius still lists Nissan as a partnr, and Nissan’s reps still state you can get Sirius. I would suggest that you take it up with Nissan. If Nissan does go an exclusive route it will be unfortunate for consumers. I think you would agree with that.
I have looked at dealer lots of Nissans and Toyotas. In actuality, neither is very present at this point.
I am presenting the OEM sales figures and the relationships that exist. the strength of those deals is not presented at all. If GM installs only 1,000 receivers, they would represent a large portion of the OEM market, but the value of the deal to satellite is meaningless. And this does not even consider revenue share, loyalty payments, the cash flow side of the deals, etc.
You say that “someone” pointed something out to you. I would suggest that you find someone else to speak to. Toyota and Sirius’ relationship goes beyond one importer and Penske. Look at the corportae Toyota website or even give them a call. The dollars that change hands is likely expensive for both Sirius as well as XM.
Please do a little research. The 2009 Corolla uses a DVD navigation system. You can get either Sirius or XM and still have navigation if you so choose.
I would suggest that you make some calls to Toyota people, and visit a few dealerships to understand how all of this works.
I understand that you want more than nothing else to have Toyota offer only XM products. My position is, again, that consumer choice is better. The assertion that things are being removed, reinstalled, and that the customer is losing something in the process is simply not the case in the vast majority of instyallations.
FrontMed you still have not backed up your second claim that Tyler has ever said Toyota is a 50/50 split. That is your problem for the most part any lie you get cought in you just move on, that “okay I missed it” was one of the only times I’ve seen you take responsbility for a false arguement, and there have been plenty of them. Also you say they are removing XM radios and replacing them with Sirius ones like it happens more so then not, dont forget there are still quite abet of models that do not come with XM factory installed radios. Once again it is my opinion (not fact, so dont bother agrueing it FrontMed) that these are the customers that Sirius wants (the ones that specifically say they want Sirus and not XM). Sirius would be willing to pay for that kind of costumer loyalty figuring they will get paid 10 fold in subcribtion fees. I would like to see the churn levels of XM and Sirius on just Toyota’s satilite radio sales. I would be willing to bet Sirius has a much much lower level then XM. Also thank you for your response Tyler, keep up the great work.
>>> Sirius still lists Nissan as a partnr, and Nissan’s reps still state you can get Sirius. I would suggest that you take it up with Nissan. If Nissan does go an exclusive route it will be unfortunate for consumers. I think you would agree with that.
Sirius is not available in any current year Nissan or Infiniti.
>>> Please do a little research. The 2009 Corolla uses a DVD navigation system. You can get either Sirius or XM and still have navigation if you so choose.
The XM is factory installed and provides Navtraffic. If somone were to opt for a Sirius port install they would give up the added functionality that XM offers (Navtraffic, for example). More importantly, they would end up with a port or dealer install rather than a factory install, and if the XM unit came with the car, they would end up paying both for an XM unit and a Sirius unit.
Obviously, not many takers on this.
>> I understand that you want more than nothing else to have Toyota offer only XM products.
I don’t really care; I’ve pretty much lost interest. It does piss me a little that you (along with SIRI’s management, I might add) have misrepresented these relationships for several years now.
It suggests that SIRI’s biggest asset is not the spectrum as you claim, rather, it is a gullible shareholder base who can be told anything without them having the gumption to question it.
FrontMed you just dont get it. When your arguments stop making sence, you turn to insults and even more outrageous ones. Such that Mel K. and now management has mind contol over people. Sounds fimilar like when you insinuated Mel had it over SIRI share holders, XM’s investors, board of directors, the private firms hired to look into the merger, and the ceo’s of both companies, that this merger not only needed to happen but XM had to give up a small percentage. Yea right, get real you need serious help. Once again it is not just SIRI management and Tyler who are the only ones that do the convincing. One of many things is the fact that SIRI has gotton more subcribers for 23 consecutive quarters, and in Canada Sirius is getting almost 80% of subscribers. A few other things could be that most analist believe SIRI to be the best investment of the two, SIRI will reach FCF positive first, they have better management, and XMSR doesn’t even have enough cash on hand to get to FCF positive unlike SIRI which does, now thats what analyst say (except John Jacopy formaly of B of A). But I’m sure you also believe Mel has the analyst under his control too.
>>> One of many things is the fact that SIRI has gotton more subcribers for 23 consecutive quarters
Actually, if you put the subscriber numbers on a comparative basis, they have pretty much split the subscriber additions 50/50 since Stern was hired — other than the first quarter. SIRI’s so-called “subscriber lead” is a product of
a) Counting, as subscribers, unsold vehicles on dealer lots (currently approaching 1 in 8 of their 8,000,000 subscribers is an unsold vehicle);
b) Promotional periods that effectively prevent churn for 16-17 months, total — resulting in about half of the new OEM installs who don’t want sat radio continuing to be counted for 17 months versus XM’s typical 3.5 months (this number is substantial, given SIRI’s steep ramping of OEM adds over the last year and their refusal to disclose a conversion rate, which suggests it is likely lower than XM’s; and
c) SIRI’s “lifetime” subscribers, the number of which are unknown but cannot churn, even if the receiver ultimately ends up in the City Dump and which most assuredly has Sirius counting dead people as subscribers.
When you put the sub #s on equal footing for comparative purposes, the number of new subscribers for each service has been about the same since Q4’04.
>>> A few other things could be that most analist believe SIRI to be the best investment of the two, SIRI will reach FCF positive first, they have better management, and XMSR doesn’t even have enough cash on hand to get to FCF positive unlike SIRI which does, now thats what analyst say (except John Jacopy formaly of B of A). But I’m sure you also believe Mel has the analyst under his control too.
First, I would like to say that I’m not inclined to spend a lot of time responding to you, because you are clearly a Siriot. However, your remarks were clearly pulled out of your ass.
>>> A few other things could be that most analist believe SIRI to be the best investment of the two
I’m not sure this is a true statement and I haven’t looked at a comprehensive list of analysts’ opinions on the two in some time. But you must take these with a grain of salt; some are beyond incompetent. Like the absolute fool referred to in this thread:
http://www.xm411.com/phpbb/vie.....hp?t=32947
In general, I believe these analysts are marginally knowledgeable of the subject matter — with a couple of exceptions (unfortunately, Jacoby was one of them).
>>> SIRI will reach FCF positive first
Utter nonsense. Don’t know where you got it, but it is totally ignorant of the facts. In 07, SIRI has had FCF of nearly (300M), while XM’s has been more like (215M). Over the next five years, SIRI has to come up with nearly a BILLION DOLLARS to replace satellites vs. XM’s $60M.
It isn’t even a close call.
>>> they have better management
“Better” is a subjective thing, but I would say that Karmazin has been a vast improvement for Sirius. He is a better negotiator (thus the 4.6 exchange rate) and he is a cost-cutter, but this is also the reason SIRI’s content has stagnated since his arrival while XM’s has continued to get better. It is probably unfair to blame Karmazin, as he inherited the Stern deal, which is what left the company in the financial mess it is now in.
>>> XMSR doesn’t even have enough cash on hand to get to FCF positive unlike SIRI which does
Another untruth. SIRI has total liquidity of 450M, while XM has about 625M.
From the Q3’07 cash flow statement, SIRI’s Operating Cash Burn is roughly $85 Million/quarter, thus, SIRI has about 5 quarters’ liquidity.
XM’s YTD Operating Cash Burn has been roughly $31 Million/quarter, thus, XM has about 21 quarters’ of liquidity.
>>> now thats what analyst say (except John Jacopy formaly of B of A).
I have no comment on what analysts have said, but the numbers have been placed before you. The cold, hard reality is that SIRI has to come up with a huge amount of money over the next several years UNLESS the merger gives them some added flexibility (which I think it does, but that’s another story).
Interesting.
1. Frontmed states that 1 in 8 of sirius’ subscribers is on a dealer lot. This translates to 12.5%. In Q3 the number was 11%, and as we all know this is the big build quarter for cars. 12.5% is an exaggeration.
Promotional periods do not prevent churn for 16 to 17 months. DCX promotional periods are 1 year. IF it takes 3 months to seel a car we arrive at 15 months. Add a month to try to convert and we arrive at 16 months. However, this is only with DCX. Sirius got paid for 12 out oif 16 months or 75% of that timeframe. Ford does 6 month promotions. Nowhere near 16 to 17 months. Others do 3 month promotions….again, nowhere near 16 to 17 months. Another exaggeration. In the end what matters is how the dollars stack up to the subscriptions.
3. Lifetime subscriptions are a very very small piece of the equation. Not even really worth the discussion. Consumers are twice as likely to subscribe under the lifetime plan. That is a GOOD thing.
4. The term “Siriot” or “XMbicile” are terms used by people who lack the ability to comprehend the issues, and adds nothing to a discussion. Those that use these terms are showing their true colors. Intelligent people seeking smart dialogue do not use terms such as this.
5. Most who tried to analyze the Wedbush report did not ebven see the numbers in the report. If they had seen the numbers and methodology they would have a better grasp of what Wedbush was saying and why. As is typical, if someone tries to debate with partial information, there are typically flaws.
6. Using FCF based on Sirius’ Q3 is an error. Anyone who has followed the sector at all would understand the cycles at play in the given quarters for each company. These are typically the same people who will shy away from the exact stance after the Q4 numbers, then try to repaint a bad picture next Q3.
7. Look more deeply into cash burn.
>> 1. Frontmed states that 1 in 8 of sirius’ subscribers is on a dealer lot. This translates to 12.5%. In Q3 the number was 11%, and as we all know this is the big build quarter for cars. 12.5% is an exxageration.
You mean “exaggeration”. At any rate, had you read my reply, you would have noted I said “approaching 1 in 8”. Now, we don’t know what the number is yet, but it is likely to be a larger percentage than in Q3. The point holds either way — 11% of 8.3 Million is nearly 900,000 subscribers. Not an immaterial overstatement.
Promotional periods do not prevent churn for 16 to 17 months. DCX promotional periods are 1 year. IF it takes 3 months to seel a car we arrive at 15 months. Add a month to try to convert and we arrive at 16 months. However, this is only with DCX. Sirius got paid for 12 out oif 16 months or 75% of that timeframe.
That SIRI was paid [back their own money] is neither here nor there; the fact remains that something in the area of HALF of those subscribers never paid a nickel for the service, don’t want it, and would have dropped it at the end of 3 months had it not been prepaid [with SIRI’s own money].
>>> Ford does 6 month promotions. Nowhere near 16 to 17 months. Others do 3 month promotions….again, nowhere near 16 to 17 months. Another exxageration.
You mean exaggeration. But the fact remains that the numbers, whatever they are, are substantial, and when all of it is combined, SIRI’s growth has not been any better than XM’s, other than for one or two quarters right after Stern was hired.
>>> In the end what matters is how the dollars stack up to the subscriptions.
No, in the end, what matters, is whether you can make money on the subscribers. But the other guy claimed SIRI’s subscriber growth was better than XM’s in the last 23 quarters, and I was pointing out that you cannot compare the two without adjusting for the differing ways of accounting for subscribers. The differences are far too great to just ignore.
>>> 3. Lifetime subscriptions are a very very small piece of the equation. Not even really worth the discussion.
Probably, but we would have no way of knowing that since they don’t disclose it.
>>> Consumers are twice as likely to subscribe under the lifetime plan. That is a GOOD thing.
I have shown, many times in years gone by, that there is no way for Sirius to make money on a lifetime subscription. Today, with decreasing SACs, it is possible — but most of those that came onboard can never be profitable.
>>> 4. The term “Siriot” or “XMbicile” are terms used by people who lack the ability to comprehend the issues, and adds nothing to a discussion.
Actually, I believe the term “Siriot” is an apt description of the character of the so-called “Sirius investor”. At this point, a strong argument could be made that any investor in sat radio fits such a description, XM OR Sirius.
>>> 5. Most who tried to analyze the Wedbush report did not ebven see the numbers in the report. If they had seen the numbers and methodology they would have a better grasp of what Wedbush was saying and why. As is typical, if someone tries to debate with partial information, there are typically flaws.
The guy is an idiot. He simply does not grasp the cash situation at Sirius. At all.
>> 6. Using FCF based on Sirius’ Q3 is an error. Anyone who has followed the sector at all would understand the cycles at play in the given quarters for each company. These are typically the same people who will shy away from the exact stance after the Q4 numbers, then try to repaint a bad picture next Q3.
We’ll see what it looks like. It is a fair argument, and I chose to omit Q4 of ’06 because I didn’t want to spend the time responding to a Siriot whose writing is nearly incomprehensible. However, the point will hold when the Q4’07 #s come out.
>>> 7. Look more deeply into cash burn.
Give me a break. If you have something to add, why don’t you make the case? I’ve stopped working up cash flow information for these companies some years ago, but I have consistently been correct in my eyeball estimates. I refer you to many posts of mine predicting the additional debt in ’07 when you and everyone else were in denial.
The merger, once consummated, will serve to muddy the water. But sat radio, post merger, has no chance of becoming a good investment. XM, a substantially stronger company, could have done okay on its own, but the reality is that retail is no longer a factor, meaning that the market is limited to the number of OEM installs that can be forced into the channel.
From my POV, let’s get the merger approved and give those of us who still own a little of one or the other an opportunity to bail out. I was wrong several years ago when I believed there was a business here. I think Sirius’ wild spending destroyed any opportunity for them, and I think XM’s marketing incompetence destroyed them. Merging these two turkeys does not help one iota; they’re still stuck with massive fixed costs, 3 billion outstanding shares, 3 billion in debt (and another billion required in the next few years), and a very hard road ahead.
1. You say that the number of cars on dealer lots is likely larger in Q3, but have no idea what it may be, and thus your guess on the percentage…..Then, you use the Q3 loss numbers to come up with your cash burn when you already know sirius put money in the bank in Q4. You also apply a 17 month time frame to car lots when that is an exaggeration. Seems that your standard is to paint as bad a picture as possible.
2. Both Sirius and XM subsidize hardware. Getting that money back is a GOOD thing. This should be an easy concept to understand. Are you insinuating that the $20 that GM pays XM is not money that XM had paid GM?
3. Yes, when comparing the subscribers you need to make adjustments. However, you can not be selective in which way you want to draw the comparison. by example, the GM revenue share is far higher than any other OEM. This is real money that goes out the door. Certainly you need to consider this as well.
4. Stating that there is no way to make money on a lifetime sub is foolish. They get $500 up front. this covers subsidies, etc. on the radio. they get advertising dollars based on subscriber numbers. They get added revenue if the consumer upgrades the radio. I suppose you will argue that the lifetime subscription that terrestrial radio offers (they are all lifetime after all) does not generate cash. THINK.
5. Whether you believe the terms Siriot and XMbicile are appropriate is not material. The fact is that such terms are only used by intellectually challenged people who have low self esteem and tend to lack class. If you fit into that category than so be it. As I stated the terms do nothing for a discussion.
6. I take it you did not see the entire Wedbush report. Take a look at it and then respond. You, like same others are trying to argue with only partial information.
7. These companies are at differing stages and cycles in their business. Only through realistic projections and assumptions can you determine which is in a better position. You stated you gave up these projections long ago. Thus, until you have something to proffer in terms of the subject, it is likely best that you don’t make assumptions.
>>> 1. You say that the number of cars on dealer lots is likely larger in Q3, but have no idea what it may be, and thus your guess on the percentage…..Then, you use the Q3 loss numbers to come up with your cash burn when you already know sirius put money in the bank in Q4. You also apply a 17 month time frame to car lots when that is an exaggeration. Seems that your standard is to paint as bad a picture as possible.
My “standard” is to look at the facts surrounding each of these statistics. I do NOT know that SIRI put money in the bank in Q4. I’ll know if that happened after I see the Cash Flow statement for Q4. The 17 month time frame is roughly correct — the car sits on the OEM/Dealer lot for 3-4 months, then they get 12 months of service followed by a month to collect. But it is beside the point — SIRI itself has made it clear that the subscriber # overstatement was 11% in Q3, and I do believe it will be higher in Q4. We’ll see.
>>> 2. Both Sirius and XM subsidize hardware. Getting that money back is a GOOD thing. This should be an easy concept to understand. Are you insinuating that the $20 that GM pays XM is not money that XM had paid GM?
I have no issue with getting the subsidy back and clearly stated it is neither here nor there. While I strongly disagree with SIRI’s subscriber counting methods, as they are clearly misleading, they have disclosed it and that cures the problem. It does NOT, however, eliminate the need to make adjustments when comparing with XM’s numbers, and when you do make those adjustments the claim that SIRI is gaining more subscribers does not hold water.
>>> 3. Yes, when comparing the subscribers you need to make adjustments. However, you can not be selective in which way you want to draw the comparison. by example, the GM revenue share is far higher than any other OEM. This is real money that goes out the door. Certainly you need to consider this as well.
Revenue share has nothing to do with putting the subscriber #s on a comparative basis. Duh.
>>> 4. Stating that there is no way to make money on a lifetime sub is foolish. They get $500 up front. this covers subsidies, etc. on the radio. they get advertising dollars based on subscriber numbers. They get added revenue if the consumer upgrades the radio. I suppose you will argue that the lifetime subscription that terrestrial radio offers (they are all lifetime after all) does not generate cash. THINK.
I believe I indicated they could be marginal on them today; but when most of these subs were taken out, the CPGA was so high that there was no way to make money on them. When you give Stern his 15% (of the five year revenue stream), then pay the other 1/3 of revenue as direct costs to provide the service, allocate the other direct costs as you need to, and pay for the receiver, you’re in the hole. I proved this time and again back when it was happening.
>>> 5. Whether you believe the terms Siriot and XMbicile are appropriate is not material. The fact is that such terms are only used by intellectually challenged people who have low self esteem and tend to lack class. If you fit into that category than so be it. As I stated the terms do nothing for a discussion.
Whatever. The point is that Sirius “investors”, in general, are clueless or they wouldn’t be Sirius investors.
>>> 6. I take it you did not see the entire Wedbush report. Take a look at it and then respond. You, like same others are trying to argue with only partial information.
I saw enough to recognize that the analyst is totally confused. This, of course, is not the first time he has been. But I have no need to reiterate what Homer has already detailed. If you believe Homer’s numbers are in error, why don’t you prove it? The simple truth is that Wedbush has failed to recognize the massive capex Sirius has in the pipeline for the next several years. If you disagree with that, and want to be credible in your disagreement, why don’t you explain what the basis for your disagreement is?
>>> 7. These companies are at differing stages and cycles in their business.
Nonsense. When I tried to explain that to you several years ago, it was true. But today, the remark is inapplicable as they are both operating at [approximately the same] scale.
>>> Only through realistic projections and assumptions can you determine which is in a better position. You stated you gave up these projections long ago. Thus, until you have something to proffer in terms of the subject, it is likely best that you don’t make assumptions.
I’ve prepared more extensive financial projections than you could ever, ever hope to prepare, and defended them astute bankers and boards of directors. When you’ve done this, you develop an eye for the stuff that matters. Anymore, these stocks don’t represent a significant portion of what I own.
However, my record on these matters is intact. I fully comprehend the cash requirements; I fully comprehend the FACT that the merger will not lead to the synergies they have advertised; and I fully comprehend the relative cash positions of the two businesses. I have been outspoken about mistakes of both companies — SIRI’s idiotic deals with Stern and NFL, as well as trying to “buy” a placement with Toyota which ends up being ridiculously expensive for a foot in the door that ends next year. And I’ve been vocal about XM’s blunder for accepting this merger with an exchange rate of 4.6 rather than the 6 or 7 it should have been.
I will say that Homer now has a better handle on it than I do, as I don’t have the interest to do the work anymore. And I find that his analysis of these issues is better than anyone’s, so there is little point.
It is difficult to envision either of these companies being a solid “investment” over the coming 5-10 years, although, without the merger, XM certainly could with some stronger cost control. Unfortunately, I think the merger is likely a done deal and the self destruction of satellite radio will be complete.
I’ve spent so much time looking at these companies over the years there is just very little that is new.
Frontmed
You are spinning and going in so many directions for a reason. You want to cloud the issue.
In your mind the “biggest question” was whether Sirius would be available in these cars. It is, now you have come up with seven or eight other “biggest questions”
If you have “lost interest” than perhaps you should not comment so much all over the place.
Anyone who has read the entire Wedbush report, INCLUSIVE OF THE NUMBERS, has a better understanding of what Kidd was stating. It is obvious that some simply have not read the entire report and are taking shots at Wedbush. Frankly I do not agree with everything Wedbush states, but I have seen the whole report. I stated my disagreement. These people have not read the entire report and that fact is obvious. When you read the report come back and discuss it
You are demonstrating that you do not understand these models as good as you think, as well as that you are simply trying to paint as negative a picture as possible for one of these companies.
1. Prove your Stern 15%
2. Prove your costs that you claim Sirius is paying Toyota
3. Prove that the Toyota relationship ends next year.
4. You say the NFL deal is expensive. Do you understand it? Do you know that many of the warrants in the deal will expire worthless?
5. You say that you do not know that Sirius put money into the bank in Q4. Did you miss the subscriber announcement? They have already stated that they put MORE money in the bank this Q4 than they did last. The fact is that you just want to pretend that this is not the case.
6. I did not state that revenue share has anything to do with subscriber numbers. I did state that whether the subs make money is what matters. 1,000,000 subs that make next to nothing, or nothing does not matter. This is EXACTLY WHY you need to get a better understanding of not only the numbers but the money. The bottom line is what matters.
Yes FrontMed it is a speculative play but you are more intelligent then all of us who invest in the satelite radio industry. It is truly to bad Apollo Management, Oppenheimer, Barclays, Vanguard, ING, and George Soros (which they all must be Siriots by frontmed ascertion) didn’t have you working for them when they invested in it. You are truly an idiot to think you know so much more then these people and the people working for them. I heard the same kind of stuff when I was invested in the Satelite T.V. industry. Yet somehow they were able to overcome the massive dept, the cost of putting vary expensive satilites up, and get people to switch from cable to satelite (made over 2,000,000 milion on a 36,000 investment, not to brag just to prove a point). So say what you will chump, but I’ll be laughing at people like you all the way to the bank, just like I did then. If not I’ll lose 87,000, oh well thats why it is a speculative play. It is funny though have not seen anymore postings from those people sense 2001, I wonder why.
I get my information from Plunkett Research Ltd., Stantard & Poors Stars report, and Market Edge Equity Reasearch, plus I read the Analist reports and most give Sirius the clear edge. The only one that has given XM the clear edge was John Jacopy and he has been fired or “resigned” from his position. It is funny though, usually you here why an analyst has left or were he is going to work next but nothing on this, once again I wonder why. Also it is interesting how analyst were down grading XMSR while upgrading SIRI before the merger was announced, and now were they put the price of both without a merger, SIRI has the larger market cap in any case making them the better company (in their opinion also). The satelites you were talking about; SIRI has two already financed, one in storage as a back up and another presently being built. Both of them are on the books and will not effect est. FCF. Next a subcriber is a subsriber, revenue is revenue, FCF is FCF, ect.,ect., and all different from each other, and almost all point to SIRI being the better of the two (for now revenue is on XMSRs side). But if things keep going like they are SIRI will win that catagory to. Two Analist have stated that SIRI was well on it’s way to reaching FCF positive and were wondering why they needed the 250,000,000 loan they had secured from Morgan Stanley back in June. That is also when one of them stated that XMSR did not, and may have to lease back its satilites to get the cash to get to FCF positive. Now you can believe the analyst or not, I tend too when most are saying the same thing, and disregaurd the one that is going against the grain (ie. John Jacopy). Unless you think these people are pulling there information out of there asses to. But you keep throughing your insults, as I have stated before that is what you do when you have been cought in a false arguement (ie George Soros and other vary reputable financial Firms are Siriots and you are the smart one). You FrontMed need help, you remind me of the lunitic who thinks everybody else is crazy and he is the only sane one.
on Kidd’s report, I note you still refuse to provide ANY support for your claim that those who question it don’t have all the facts.
The bottom line is that for his statement to be true, XM would have to have over $200M in negative cash flow for Q4’07. Do you believe that could conceivably be the case?
>>> 1. Prove your Stern 15%
Well, the deal isn’t completed yet. But we know that it is roughly $750 Million over five years; SIRI appears to be leveling out with revenue just over a billion (although, 06 was only 637M). 750M/5B = 15%. Maybe it ends up being 13%. But more than 10%.
>>> 2. Prove your costs that you claim Sirius is paying Toyota
Sirius is not paying Toyota. They are paying one of the distributors. While the amount they’re paying has not been disclosed, it has been pointed out to me that it is enough to make the port want to tear out a higher-functioning XM unit (i.e., one that contains Navtraffic) and put an aftermarket Sirius unit in the dash. We don’t know how much it is but we do know it is a LOT.
>>> 3. Prove that the Toyota relationship ends next year.
There is no “relationship” between Toyota and Sirius. The relationship is between ONE of the importers and Sirius. I can’t prove that it ends next year; I thought it would end last year. It will end in the coming year or two, however, and when it does, you won’t be able to get a Toyota with Sirius preinstalled. It really doesn’t matter, however, since the number of Sirius installs is minuscule.
>>> 4. You say the NFL deal is expensive. Do you understand it? Do you know that many of the warrants in the deal will expire worthless?
NFL was overpaid without the warrants. I told you the day the deal was signed it was a stupid deal, and have been proven right as I have with the Stern deal. The reality is that you cannot pay high-profile talent like Stern and NFL a combined billion dollars and expect to be profitable. Sirius has proven this is a fact.
>>> 5. You say that you do not know that Sirius put money into the bank in Q4. Did you miss the subscriber announcement? They have already stated that they put MORE money in the bank this Q4 than they did last. The fact is that you just want to pretend that this is not the case.
The fact is I haven’t seen the financial statements. That is the only way I’ll know whether they put money in the bank or not. And you, too.
>>> 6. I did not state that revenue share has anything to do with subscriber numbers. I did state that whether the subs make money is what matters.
There has yet to be a profitable subscriber in satellite radio, and there will not be for at least a few more years.
>>>>>>The satelites you were talking about; SIRI has two already financed, one in storage as a back up and another presently being built. Both of them are on the books and will not effect est. FCF.
Totally clueless.
They still owe $125 Million on FM5, and they have paid zilch on FM6 (which will cost $270M). After that, they still have two of the current sats that have to replaced by about 2012 (which means financing has to be available in the ’09-’10 time frame). Another half billion.
>>> Two Analist have stated that SIRI was well on it’s way to reaching FCF positive and were wondering why they needed the 250,000,000 loan they had secured from Morgan Stanley back in June.
The month before that loan was announced I posted about their cash shortage on Yahoo and explained precisely why they had to have it. The Siriots told me I was nuts. The next month it hit. If you want to know why they needed it I suggest you go and find that post.
Not only do they need THAT money, they are still short by a 3/4 billion or more over the coming few years.
What you and others don’t understand about “cash flow break even” is that it doesn’t mean anything. It is highly subject to manipulation, and Sirius has been manipulating it for two years. This is why we (CPAs) don’t use it to measure income. It is not a metric that is suitable for measuring economic profit or loss.
Frontmed….
I see, you can come to conclusions on William Kidds Report without having seen the report, but you refuse to assign to recognize that Sirius has already stated they will be banking substantially more money in Q4 this year than they did in last Q4. PRICELESS
1. Read Kidds report. You will see that the path you are walking down is not a path that you should be walking down. I do not know how much more simple it can be. READ THE REPORT.
2. You say that 1 Toyota distributor has agreements with Sirius. Toyota says otherwise. Kindly refer to Toyota U.S.A.’s own FCC filings in the merger process. or Toyota’s corporate website. despite your refusal to accept reality, Toyota is working with Sirius.
You are all over the map, and spinning at every trun.
>> Read Kidds report
please don’t continue to try and dodge the issue.
Kidd said, “we expect XM to generate negative free cash flow of $148.2 million in 2008 vs. $411.6 million in 2007.” I defy you OR Kidd to show how XM’s FCF was ($411) in ’07. XM would have to have a $200M shortfall in Q4 for this to happen, which surely, you can admit is not even mildly conceivable.
It is idiots like Kidd, and people like you who post this nonsense as truth, who keep Siriots like John thinking Sirius’ financial position is better than it is. (I am open to the possibility that Kidd merely made a mistake; but if so, he should correct that mistake).
>> I do not know how much more simple it can be.
This is your typical cop out.
If you are relying on something in the report you did not post here, you should cite it like a normal adult.
Considering everything David Frear(CFO) says about the company is watched and over looked by the SEC, I will tend to believe what he has to say about the satilites being funded (do they owe on them yea, but they also owe a billion dollars like I said financed *funded* dumbshit). First they have the satilites they need up already, Second they have a backup in storage (hense the word “backup” to be used if needed). third they are building another. I dont know were you got your 2012 date from, but in that same press release (about the new sat.) they stated this satilite would fill all their needs tell 2018. I can also tell you this; there are alot satilites that have gone beyond a certain date of usefulness(replacement date) and have yet to be replaced, and still do the job they did 5 and 10 years past the date they were suppose to be replaced.
Yea right, I am going to look up what you have had to say on another post about anything and find it to be believable. You obviously dont remember the dumb shit you have filled space with here. Then again I have said it before you get so confused with your false arguments, when proven to be so you move on to something else its like you dont bother skolling up (sound familar). Thanks but no thanks I will stick with what analyst have said after the loan was approved.
Frontmed.
I don’t know how much more simple this could be. YOU NEED TO READ THE REPORT. Then, like an adult you can discuss it. The comments you and others are making illustrate that none of you have bothered to read the report. Perhaps it is because you have “little interest”, or something else, but I would suggest you read the report. Look at the type of analysis Kidd is referring to, and the numbers he presents in his reports. You will come to your answer by doing this. Until you read the report you can not really discuss it.
Until you read the report, the discussion is fruitless.
>>> YOU NEED TO READ THE REPORT
Great cop-out.
Why are you dodging the issue? If there is something in the remainder of report that you believe is inconsistent with my conclusion, post it. If not, then just say so.
This is so typical of you, and is the reason you lost all credibility (except on your blog, where only Siriots read your ramblings). You simply cannot answer tough questions when you’re challenged.
Clearly, this fool made a mistake. You effectively SUPPORTED that mistake by posting a summary of his report, and you didn’t have the awareness to have caught it on your own. And now, you feel foolish because several people have shown his report to be fundamentally in error.
So, you when challenged, rather than citing quotes from the report to support your position like the rest of us routinely do, you just say, “Go read the report”.
Well, most of the people reading this nonsense don’t know you. But I’ve been reading since the day you bought into SDARS, and you just as clueless today as you were then.
>>> I will tend to believe what he has to say about the satilites being funded
Okay, so you’ll believe David Frear? From the Q3 CC:
“David J. Frear
And then on the Sirius 5 program, we’re about halfway through the program and so I’d say we’re about halfway through the money as well.”
>>> I dont know were you got your 2012 date from, but in that same press release (about the new sat.) they stated this satilite would fill all their needs tell 2018.
Obviously, you have no idea what you’re talking about. You and should get together.
Their existing satellite infrastructure, the three Molniyas, have to replaced by around 2012/2013 as their useful lives will be over. You cannot run Sirius on a single satellite. Duh.
Frontmed…
There is no cop out. I have asked you to read the report and you seem to not want to do that.
Yes, reading the full report would give you a different conclusion than where you currently stand. I have expressed this, and asked you to read the report. You seem to want to be at the conclusion you are at, and thus refuse to read the report.
Why don’t you read it?
I am not dodging, I am trying to get you to catch up to the conversation so that a conversation can happen.
Okay, well, I think it is clear you are unable to cite anything contrary to my posts. When you do, I’ll be glad to respond.
To any objective person, you are posting pro-Sirius BS without regard for whether or not it coincides with the facts as we know them.
Nothing new here.
Frontmed…
I can cite many things that counter your posts. However, I have asked that you read the report so that a discussion can happen. You, for whatever reason, refuse to read the report. Until you understand the subject matter of the discussion, how can a dialogue happen?
To any reasonable person, I posted report excerpts from an analyst as I often do. I did not interject my opinion on the excerpts. I do not filter the reports for “Pro-Sirius” or “PRO-XM”. I simply post them.
Because you came to a conclusion without reading the reports is not my problem, nor is it my issue. I pointed out that you would likely not carry the same stance if you read the report. You simply don’t seem to want to do that.
“The Facts As We Know Them?????” You have not seen the facts. Your version of the facts is based on incomplete information.
The reason there is nothing new here is because you refuse to read the report. The request was quite simple and quite reasonable.
Well first of all you have stated that as of 2012 they would need to replace these satilites, now you say 2012/2013 whats next 2013/2014. Were do you get your information because it keeps changing. Once again I’ll say it, eqiupment is always given a expected life of usefulness and in most cases it exceeds it(Skylab, Hubble, Mere space station, Mars Rovers, most of the Soviet Unions communication satalites, alot of ours (commercial and government), the B-52, F-15, F16 even with repairs/modifications were suppose to be scaped a long time ago). The list gos on forever. Thats why they have a what SIRI calls a backup in storage and another one being built. But if you think they or any company spends the money to sent a satilite up reguardless if they need it or not, thats your right. I will believe that even if you got crediable information on the life of those satilites 2012, now 2012/2013 or what ever the new date is, that they will wait until it is a piece of space juck before they spend the money to send the new one up.
>>> Because you came to a conclusion without reading the reports is not my problem
Okay, I’ve gotten the report and read it. I see nothing, whatsoever, that changes its meaning from what you posted.
What, exactly, are you referring to? Please cite pertinent quotes.
>>> Well first of all you have stated that as of 2012 they would need to replace these satilites, now you say 2012/2013 whats next 2013/2014.
If the satellites have to be operational by 2013/2014, the replacement process has to begin in 2010.
So lets see here you start out by saying the two satilites have to be replaced by about 2012, then its 2012/2013, and now it is 2013/2014. you sure thats it, you dont want to go for 2014/2015. I feel like I am at a action.
2013/2014 was your time frame, not mine.
The point is the satellites will be approaching the end of their useful lives at the end of the decade, and you cannot wait until they are dead to replace them — you have to start spending money several years ahead of schedule if you want to replace them before they just stop working.
Over the course of the next several years, you’re looking at close to a billion dollars in expenditures for satellite replacement. XM, with new satellites and requiring only two (versus 4) to provide service, does not face these massive cash demands.
If you want to argue with this, it is out of your own ignorance.
My time frame, were did you get that. I put those last dates in to show how you have changed your dates, and to sarcastically show this. My date (2018) was from the press release were they anounced the new satilite that was going to be built. I’ll say it again, were did you get your dates from. You tell me that and I will check them out for myself. Excuse me if I dont trust your time frames or your reading of the information were you got it, ie. your translation of that information. Example the designers of the Mere space station gave it a life span of between 4 and 6 years (it was used for 15 years), you would say it had a life span of 4 years if it was a Sirius project. Next thing once again they have a backup if one gos down they can run with 3. I have seen nothing on any planned launch of this backup like I did with the DISH launch of EchoStar 10. If you dont think they can run with 3 then your talking from ignorance. Ergo one gos down they put another up.
This is going in circles. And when we transition from satellite radio to space stations, I think it is time to give up on you figuring it out.
In response to frontmeds last comment: Yea that happens with you when you cant back your arguement up. Whats the matter couldn’t find the sight, or did you just pull those dates out of your ass. I bet it was the latter of the two. Your last comment also shows you have no cognitive skills. So I will explain; first the word (example) was put in the front, it was ment to show how you spin a phrase or comment to your position, and why I dont arbitrarily believe anything you say. This is why you are so messed up **EXAMPLES**; You try to convince me you are right by telling me to go to a posting you did on YAHOO (real lodgical premise there). Second every time you get cought in a false premise or arguement you move to multiple other ones. **END EXAMPLES** I have said this before to you and Tyler has mentioned how you tend to go in several directions at one time. This is why you get stumpted up and caught in so many false premises (you try to defend a false premise with a different arguement, you then have more false premises in that arguement, and so on, and so on).
To be honest, I’m tired of interacting with you because your posts are almost unintelligible.
When you’re typing and the form underlines a word in red, that means you’ve misspelled it and it needs to be corrected.
I can correct your post to, but I didn’t think we were in a essay contest. So here we go: you dont start a sentence with (And), when you use (useful lives) should have been (end of their life span), you use way to many commas, and so on, and so on. I do these things also, but I dont try to correct someone else on their typos, grammatical errors because of that. You should do the same.
Also you just proved my point about my last comment, as you yet again flip to another arguement.