Total net subscriber loss for Q1 2009 predictions

[sxminvestor]

From WSJ positive article out tonight:

http://online.wsj.com/article/SB1241...p;mod=yahoo_hs

A challenge for Sirius XM is the slump in car sales, since many listeners first encounter the radio service while driving. But many car companies say a growing share of their new vehicles are being equipped with satellite radios. For instance, Jon Bucci, vice president of Toyota Motor Sales USA, says satellite radio was factory installed in four times as many cars in the year ended March 31 as in the year-earlier period. Growth rates should be similar this year, he says

This could help boost the sub #'s to closer to even. Ford has also had the hottest selling cars and they are near 100% penetration now.

- this article actually came out after the market and afterhours, so the momentum will likely build into Thurs a.m.

[sxminvestor]

They will gain 1 sub and stock will skyrocket

[JohnnyIrishXM]

if they pull out a 4Q sub number they will hit .80 by next week..book it

[sxminvestor]

if they pull out a 4Q sub number they will hit .80 by next week..book it

If they pulled the same as 4th, they would be .80 in about 1 minute.

[TSavery]

Ive never stopped posting here. I post where I can offer anything or learn. As I can still learn from this site, I will enjoy it. If I feel I cant offer anything, then I wont post.
The title of the thread reveals how Charles has felt about this STOCK for months. Hes been wrong for months, and he will keep being wrong for many more months. I have nothing against Charles, in in fact if you read my posts, you will know that I havent taken sides. Ive defended this sites position on the PM point, I even ripped Rick for it. Move on ,this topic on this thread has nothing to do with your comments. I even called out Newman for making sure the other site" was working" before moving on. I dont hold my punches, I could care less what "site" is involved or the person.
My reasons for my take...
1. XM lost a ton of subs in Q4 for reasons that are not "continuous".
2. Car sales picked up in March, near the end.
3. Apps got a bit of attention this quarter.
4. Deeper penetration in autos vs. last quarter.
5. Sirius has been know to "forget" to turn off radios when they cancelled.
6. BK issue. People may have been waiting to see if they were even going to be around come March.
Im not just "hoping", I actually have reasons.

Relmor.....

I regards to your statement that deeper penetration will help the number. Think of it this way.

If the auto industry was to sell 100 cars, and Sirius XM supplied 50 radios, the penetration would be 50%.

If there was a slow down in auto sales to 75, but Sirius XM still had 50 radios, the penetration would now be 66%.

The impact on subscribers was the same, 50 subscribers, with a 50% penetration rate as well as a 66% penetration rate.

It is not the penetration rate that matters, as much as the number of radios Sirius XM is supplying to the OEM channel.

[JohnnyIrishXM]

Relmor.....

I regards to your statement that deeper penetration will help the number. Think of it this way.

If the auto industry was to sell 100 cars, and Sirius XM supplied 50 radios, the penetration would be 50%.

If there was a slow down in auto sales to 75, but Sirius XM still had 50 radios, the penetration would now be 66%.

The impact on subscribers was the same, 50 subscribers, with a 50% penetration rate as well as a 66% penetration rate.

It is not the penetration rate that matters, as much as the number of radios Sirius XM is supplying to the OEM channel.

Tyler agree if penetration rate was related to number of cars sold,but i believe it relates to how many cars Built have SATRAD in them,correct..
I'm seeing post all over the place of Siri being in almost every car on the lot and salesman saying it is a must have option,plus now WSJ article saying it.
But using your math if penetration jumped from 50% to 70% that same 75 cars would produce 53.5 subs instead of 50..and that number is conservative.
And the wild card is used cars,which Greg Maffei said they were attacking in March 12 CC.seems to me it is easy to turn SATRAD on and split rev with dealer for a couple of months to get it done,no SAC or Radio cost involved.

[sxminvestor]

Relmor.....

I regards to your statement that deeper penetration will help the number. Think of it this way.

If the auto industry was to sell 100 cars, and Sirius XM supplied 50 radios, the penetration would be 50%.

If there was a slow down in auto sales to 75, but Sirius XM still had 50 radios, the penetration would now be 66%.

The impact on subscribers was the same, 50 subscribers, with a 50% penetration rate as well as a 66% penetration rate.

It is not the penetration rate that matters, as much as the number of radios Sirius XM is supplying to the OEM channel.

Tyler -
There is a planned penetration rate that they have with their OEM partners and the OEM would not install into a car that did not plan on just because Sirius supplied them with enough radios to cover them.

Lexus has XM preinstlled into LS & GS models and just an option for the IS. Would they have preinstalled the IS because they had some extra radios on the shelf ?

I don't quite understand what you are saying. I just read in a WSJ article that Toyota has installed satellite radio in 4X (article above) as many cars than the same period last year because their contract is set for them to ramp up in 2009, not because Sirius or XM sent them 4X as many radios.

This deeper penetration with Toyota, Hyandai and Ford may keep them even or close to and surprise alot of people on Thurs.

[Siriustunes]

For instance, Jon Bucci, vice president of Toyota Motor Sales USA, says satellite radio was factory installed in four times as many cars in the year ended March 31 as in the year-earlier period. Growth rates should be similar this year, he says.


I think Mr. Bucci gave us the answer in the WSJ article. He is comparing next year to Toyota's current year ending 3/31. With 4x more installs in Toyotas in 2009 then it seems 1st quarter numbers cannot be too bad.

[relmor2003]

Well... If my guess is crazy, between 100k loss and 80k gain, then this Miller analyst agrees with me. Hes going with a net loss of 60k. Right in my range. I see your point about it being important WHICH company is counting the sub, but SiriusXM only has to be consistant in how they arrive at these generic sub numbers.
Obviously fewer car sales hurts, but more SALES being made with cars with a sat radio in it does help offset this a bit. Regardless of the specifics of each deal. Remember, we were always using a generic method to determine sub growth from auto sales..
Total sales, divided by half(half dont carry on the service), and say half never even had the chance because the car didnt even have a radio in it. So ALL things being equal for sake of argument its a simple math problem, as I dont need to know in this equation which sub is actually which, or which car maker is selling more radios in their cars than others...

This is the formula we have been using.
A - B / C = D.
A = Total cars sold. Remember, Im going to assume more cars are available with satellite radio in them this quarter than last quarter. Regardless of when the sub becomes real. Because remember, SiriusXM on their sub total DOES NOT distinguish these figures.
B = Number of cars that did not have satellite radio installed in them.
C = Percentage of customers who end up counting in the sub total.

Lets see...
Without getting into exact percentages, as this is just an example...
Roughly 70 percent of all cars sold have a 70 percent chance or better of having a satellite radio installed in it. 165K cars sold far this year have a 100 percent install rate. 163k have 80 percent install rate, and 980K have a 70 percent install rate. That leaves 553K at a 50percent install rate. So basically 70 percent average is a good indicator. But well go lower. Lets use 65 percent, helps with your "Toyota" situation... etc...
So based on last years figures...
13 million cars sold....
50 percent of those cars had the option to have a radio in them, and 50 percent of those people decided to keep it. Thats 3.25 million sub additions for the year.
Using the same numbers for 2008, with the new penetration...
13 million cars sold...
65 percent of those cars have satellite radio in them, and 50 percent of those people decided to keep it. Thats 4.225 million sub additions.
Based on last years penetration....
So far this year...
2 million cars sold... A bit less actually...
50 percent of those cars have satellite radios...
50 percent of the people decided to keep it. Thats 500k new sub additions.
Using the newer penetration figures available....
2 million cars sold...
65 percent of those cars have satellite radios...
50 percent of the people decided to keep it. Thats 650k new sub additions. for an increase of 150k subs from last year possible.
So lets project year end.
Lets say they finish decent, and sell 10 million cars vs. 13 million cars.
10 million cars sold...
Using 65 percent gives you 3.25 new sub additions..
13 million cars sold...
Using 50 percent gives you 3.25 new sub additions.
By just increasing cars cars actually sold with radios in them allows 3 million fewer cars sold, and it equals out.
I understand your point about when a sub is a sub, but since SiriusXM doesnt break down the total sub count, and thats what we were talking about, you cant either. Were looking for total sub count net loss/gain. Not number of promo subs vs. toyota subs, or GM subs, or this radios on the shelf...Etc..
SiriusXM does that in their filings for us, but the total sub number is all the street looks at at a glance.

[tim wallick]

From WSJ positive article out tonight:

http://online.wsj.com/article/SB1241...p;mod=yahoo_hs

A challenge for Sirius XM is the slump in car sales, since many listeners first encounter the radio service while driving. But many car companies say a growing share of their new vehicles are being equipped with satellite radios. For instance, Jon Bucci, vice president of Toyota Motor Sales USA, says satellite radio was factory installed in four times as many cars in the year ended March 31 as in the year-earlier period. Growth rates should be similar this year, he says

This could help boost the sub #'s to closer to even. Ford has also had the hottest selling cars and they are near 100% penetration now.

- this article actually came out after the market and afterhours, so the momentum will likely build into Thurs a.m.

i read a fcc filing from ford in november 2008 in it they state they reached almost a 70% rate and are specific on the conversion rate to paid being 47%

in the broader auto market penertration rates should be higher currently as a fuction related directly to sdars/oem long term contracts in a shrinking market which should lead to better exposure to all consumers. tyler points to a issue of shelf/stored radios with oems correctly Vs the new radio build/supply rate which truly does matter. i also think they have room to work through this whole issue and am shocked they have not started something more publicly and long term online to inform older cars owners about satellite radio availability