We Live In Interesting Times
While on vacation in Las Vegas, I have had a great time, taken in some shows, and spent time with my family. I have also been able to maintain what is happening in the news because of my Blackberry. Only a decade ago, a cell phone was not standard equipment for every human aged 12 and up. Now, we are so technologically tethered, that it has become difficult to imagine life without our gadgets.
I took the opportunity today to pick up the weekend edition of USA Today. On the front page was an interesting survey that shows that even in tough times that people seem to feel that their gadgets are even more important now than ever before.
In 2006 the Pew Research Center conducted a survey of items that people felt were a necessity. The same survey was conducted a couple of weeks back, and the results were very interesting. It would appear that items that people categorize as necessities has shifted substantially. Microwaves are out, and iPods are in. In these poor economic times who would have imagined that this would be the case? In 2006 68% called a microwave a necessity, now that number is 47%! In 2006 television was at 64%, today it is at 52%!
Air conditioning lost 16 points, dishwashers lost 14, and clothes dryers lost 17! Times are perceived as bad, so perhaps these numbers are a sign of people cutting back…But then again, look at some other items, and you may begin to question priorities. Flat screen televisions gained three points. High speed Internet gained 2. iPods gained 1 point, and cell phones remained flat.
What we are seeing here is a shift in the thinking of consumers. Does this mean that satellite radio, considered a luxury by many, actually has a chance of being considered a necessity? Well, there is no evidence from this survey to indicate that SDARS is any more or less important to people. It simply was not among the data entered. However, there is a clear shift in what people are considering a necessity today, and electronic gadgets seem to be stable.
This survey alone does not point to anything specific with regard to SDARS. In fact, the subscriber numbers in SDARS have not been very good over the past several months, and that trend is not likely to reverse when Q1 numbers are reported. I feel it would be a stretch to categorize SDARS as a must have item, but it was the flat panel television and iPod data that made me stop and ponder. Many readers here are also subscribers, and many have stated that they would never return to terrestrial radio. I myself feel that I will always have a subscription. iPod has reached a critical mass. Satellite simply is not to that point yet, and this is precisely why they need to do the little things that will keep existing subscribers and bring in new ones. In this economy a task such as this is challenging at best, but if SDARS is to grow and get to profits it needs to happen.
There does exist a core group of subscribers that are “lifers” when it comes to SDARS. Given the fact that it has been demonstrated that an iPod can become a necessity to many gives SDARS a bit of hope that it will be able to ride through the tough times, and could perhaps do very well when the perception of the economy improves.
We are living in interesting times. I guess there are people out there that would be happy to hang clothes on racks in their kitchen as long as they can do it listening to their iPod and watching a flat screen television.
Position – Long Sirius XM
Very interesting Tyler. Along those lines I have a friend (workplace & golf) with two kids who has 4 subs to XM. He wouldn’t do SIRI because of Howard. But two of his subs are new with an introductory offer of $4.99 for 6 months. He has a good steady job but I was a little surprised that he has 4 subs. He stated that he would not think of going back to regular radio. He is not a stockholder (I am) and I did not initiate the conversation. So maybe your take on SDARS has some merit. I definitely think the cell phone is becoming indispensible. I could see people in dire straits hanging on to their cell phone
Tyler,
Many just don’t understand sdars and I feel that SiriusXM has not done enough to promote it. I like to listen to music, but i also like talk radio, news, sports etc. Driving across this vast country of ours, tereestial radio, and ipod tend to get monotonous. SDARS fills that void. Another aspect that many tend to forget is the weather, traffic, navigation and video features. SiriusXM’s problem is not promoting all of its features.
Here is a question that Tyler and alike fear to address. How many actual subscribers are there? Again, based on a sample of over 6500 voters, more than 50% have multiple subs. This is a question no one wants to answer including SiruisXM management. My theory is that the answer is extremely ugly. There actualy may only be 9-10 million subscribers.
Afraid to answer? The numbers are right there for you. Simply look at the ARPU. This gives you the average revenue per user.
People having multiple subs is a good thing. It brings ARPU down a bit, but that is fine. Revenue still comes in the door.
In my house I have 5 compiters all equipped with Windows.does microsoft count me as one user? NO. Why should sirius xm?
If satellite radio had w person with 10,000,000 accounts would it matter? Not as long as they are generating revenue.
There is nothing to fear in the sub numbers, because we have the ARPU to establish the value of the 19 million figure
What that 10 million shows is poor penetration. It shows what a poor job management is doing. It shows that Mel does not give a shit about this company. It shows that management wants to take this company private. It shows that management wants to wipe out the shareholders of this company.
Siriusxm…
The company has had consistant multi unit subs for years.
Has the company not cared about investors since it started? Have they wanted to take the company private since then?
You stated that everyone was afraid to talk about multi unit subs. I showed you how to figure out the number, and rather than take that understanding and digest it, you instead decide to bash the compay using what was a purposefully exageratted example. Very telling
If your method is that simple, please tell me why Blalock is out right refusing to tell me how many subscribers SiriusXM has.
It sounds like you don’t want to accept that each active radio represents a subscription. What you are doing is creating your own definition of a subscriber, and asking the company to jump through hoops to satisfy your definition. Why would they do that?
If there are 19,000,000 subs and ARPU is $10, what does that tell you? Can you derive a good estimate the multi sub slice of the pie? You should be able to.
I would suggest that you do a bit of homework, before asking this question. You need to do a little math.
Tyler,
I am one subscriber that happens to own 4 subs. I am one single individual. Tell what the poll on the front page then represents. My point is that the 19 million number is a misnomer. It is not a true representation of the actual total sub number. Similar to when Sirius used to say there are 37 million listeners. They were basing that number by more than one person being in a car that has a sub. It is wrong, period. I believe they have stopped that statement. I hope you will not ban me from this site for debating this issue. BM just banned me for for calling him out on his last statement in the Stock Shock trailer.
How many subs do you pay for?
I have 3 subs. I listen, my wife listens, and my parents listen. By your definition my wife and parents do not exist. Sorry, I choose to know that they exist.
Stop trying to redefine the definition of a sub. It is a fools chase, that I will not paerticipate in. It gains you nothing.
My point is is that the penetration rate is weak. It is not in reality 19 million people owning a sub. Between me and you, we are two subscribers(individuals) that happen to own 7 subscriptions. It is not 19 million people who subscribe to SiruisXM it may be only 10 million. I am not arguing with you, I am just trying to make a point about subscriptions.
I’m not sure how the combined company counts subscribers, but in the past sirius reported add-on subs as increased revenue per subscriber rather than as multiple subscriptions.
Are you long? And if so, why?
Because I want my money back.
Your logic is flawed though, I buy milk for my family. I drink it, my wife drinks it, my son drinks it, and my daughter does as well. How many consumers are there in this example. The answer is 4. You want to believe that I am the only consumer.
Subscriptions are consumers.
As an investor I am left to use the metrics, as defined by the company, accepted by analysts who evaluate the company and rate it, and then make a decision as to invest or not in that company. It serves no purpose to redefine those metrics just because you understand something about its composition that is not pure in your mind, SXMInvester.
Knowing that the mix affects ARPU is enough for us to measure performance quarter to quarter, YOY. Understanding the mix of subscribers helps to project the impact of certain pricing changes, as it relates to churn also…. The standardization of the metrics is not deceptive and during conference calls I have heard management address “The Mix” of subs and its effect on ARPU… This understanding of mix can also serve as an operational goal to increase the amount of new and unique subscribers out there, and to then target them for up sell and expand their usage of their service by expanding it to family, B of B, etc… hence the program name Family Plan…
I do not see your goal here as being anything but to discredit management to serve some other goal than to have this company be successful… in that we are opposed. You say your invested so that you can get your money back. I say its not by wanting the company be successful in the marketplace but, rather in have yourself be successful in a courtroom….IMVHO….
About 20% of the subscriber number is in the family plan. It has been gone over in quarterly calls, and I have written.and spoken of it numerous times.
I did not call you out in this because I had hoped that you would go back and do a bit of reading of past articles so that you could get to these numbers yourself. You started this out saying that I fear discussing this. Yet here I am on vacation doing just that.
I get attacked a lot, but rarely does anyone say, “I was wrong”
Tyler,
I apologize if you feel I’m attacking you. That is not my intent. I am just trying to make a point. I am not looking at this from a technical or metrics standpoint. I am looking at from face value. And face value says there are not 19 million individual subscribers.
“take something at face value”
to accept something because of the way it first looks or seems, without thinking about what else it could mean
(often negative) These results should not be taken at face value – careful analysis is required to assess their full implications.
So…. finally we’re getting somewhere. The proclaimed 19M Subscribers is Face Value of this gross group of consumers used to generate operating / revenue metrics for the company. Careful analysis of these gross numbers has us understanding “The Mix” better. That they are all not unique consumers but, in fact, might have and be counted for more than on subscription… I’m done have a good night.
I agree. I just feel we need a better count from the horses mouth. And SiriusXM must do a better job aquiring and keeping subs. The Iphone app would help. It seems it is taking longer than anticipated. Hopefully they will generate subs from this venture.
This argument is nuts. What counts is revenue. It means nothing whether one person owns one radio and subscription, or it one person owns 4, or if 4 persons each own 1. From a biz perspective, it’s revenue generating subs, not people. To try to dissect it is meaningless, and elusive. For example, some people will buy a ‘portable’ s-xm radio and several car kits, and move the radio between cars, dock it in their homes, etc. It’s counted as a single sub. Perhaps it’s a family of 4…..but how do we know? We don’t. So, it counts as one. Those who have a separate sub in each car, and perhaps one in the home, have multiple subs. So, it’s all about the subs, not the people. If a restaurant has a single commercial sub, it counts as a sub, even though hundreds per day may be exposed to the programming. At the end of the day, the only time it really matters on estimating ‘listeners’ (as opposed to subs), is when you charge for advertising. And, in those cases, advertises want audited numbers, not wild ass guesses. But, as a sharelholder, I only care about revenue generating subs, not the number of people listening who are NOT PAYING! JIMHO.
Well.
Here is Socal’s sum from the above posts for the weekend.
1. Tyler is definitely rested. That is a good thing.
2. XM investor, has to be applauded for his ability to maintain his position, yet give Tyler his due. Clap clap.
3. XM investor is in many ways like most of us longs, who sometimes see their account balance as an investor in this stock, and wish another digit or two could be added to it.
4. COS is always the Siriusbuzz mediator. Must come with age. lol.
5. Tyler, XM and COS are all on the same side.
In conclusion, I have to say that I miss the old days when we rang up 100 posts on these articles in one day. Additionally I feel that Tyler has been more positive regarding the company, which in my view is a BIG positive in itself.
Good Luck to All.
“Interesting Times”? Sure enough…….
If surveyed two years ago I would say (and DID post on other Sat Rad sites)that I would give up the cell phone & the internet before I would give up my trusty “little ol Xm SkyFi” generation 1 receiver.
Since the merger has had time to “prove itself” I can no longer make that statement.
Under the inept leadership of Mel & his minions my attitude about SatRad has changed. Since I now have broadband and can access a bunch of great radio stations and download programs like Zoltar’s “Subterranean”(because his full program was kicked off the air by that piss poor channel “Area”) and great comedy offered by “Slacker” (since SiriusXM’s “Rawdog” is so substandard compared to XMComedy).
Now I know that I can get through the day if Sat Rad went under.
Mr. Savery, who or what do you think is responsible for my change of attitude???
I WAS a core subscriber you have posted about. Only thing is I cannot accept the decline of programming,incessant yakking and smaller playlists on some of the channels.
It is a pity if the only rationale is to say “Hey,its still better than terra radio”. Compared to what? Talk radio with 50% of the time devoted to commercials or the same 20 songs played on most “classic rock” FM stations? There are NPR radio stations that can give B.B. Kings “Bluesville”,or The Bluegrass channel a run for their money. WXRC’s(95.7/”The Ride” – an independant commercial station in Charlotte,NC)is definately on par with “Classic Vinyl” and their DJ’s are BETTER!!!
Sadly, it appears you are settling for a decline in quality and unfortunately cheering it on.
Also just to let everyone know:
My trusty “little ‘ol SkyFi” USED to go everywhere with me. I have it rigged for mulit-vehicle and office use. Nowdays I mainly leave it at my office (unless I’m roadtripping) because it just not the same. At home I almost listened exclusively to XM’s DirecTV’s feed through our home entertainment system. Now we stream several classic rock stations via computer and if we’re in the mood we MIGHT listen to “Watercolors” but we find we listen less than we used to because sometimes they get to yakking too damn much. We’ve given up on “SoulTown” and “Spa”.
Yep, I WAS a hardcore Sat Rad fan but thanks to Mel & Co. that’s a thing of the past. We’re the core demo—-“Boomers” who grew up on great music and felt so damn good about the first few years of Sat Rad. Now it’s like some good friend who has betrayed us.
Boomers who grew up…. on great music… and felt so good about the first few years of Sat Rad…..
Your the one who has betrayed…. with a bullet my friend… what BS you spew….
So now that you killed SAT RAD where can we find you now ….?????
Killed Sat Rad???
Not I…HELL NO!!!!!
I truly WANTED it to succeed.
I was one of the biggest proponents of Sat Rad you could EVER find UNTILL the merger & subsequent elimination/substitution of channels worth a damn and the decline of programming and formats. I gave the combined companies some time to see how it would go but that time has passed. Mel & his minions have royally screwed up one of the best broadcasting mediums of all time.
What planet are you from?????
If you accept/endorse the present situation,you are accepting/endorsing an inferior product my friend.
Indeed, if ARPU is $10 as Tyler says, you can very roughly estimate Sirius XM subs at about half the 19 million active units, or just under ten million actual users.
9.5 million X $13 base subscription
9.5 million X $7 second unit
divided by 19,000,000 units total
equals ARPU of $10. Roughly speaking.
So we may be talking about under 10M individuals/families/whoever who decided satrad is worth paying for. And that # is certainly shrinking, as the “pro forma” reports last quarter hinted.
Too confusing-I get xm on direct tv as partof the package-
Question to SB
Am I a subscription?