Subscribers

[TSavery]

My negligence, but I was never aware that a sub was counted when it was built and sent to the carmaker. That definately threw my numbers off. As did my believe that a sub didnt count until it was activated by the customer(promo sub). hence subs sitting in cars, and subs sitting on shelves would make auto sales slowing down hurt subs simply because they didnt need more radios. So you have less car sales from deals that didnt count the sub until the promo was activated, deals where its activated when the radio is installed, and deals the sub is activated simply by producing the radio. INSANE. No wonder my numbers were so far off. Now heres the kicker Tyler, WHY DID MILLER THE ANALYST agree with my dumb numbers. Is he as ignorant on how subs were counted as I was? I knew about promo subs vs. self pay, but I had no idea that promo subs have 55 different types that activated the sub count at 55 different times. Exaggerating a bit.

Relmor.....

Most analysts cover several stocks. Because of that they do not have the time to dive into the metrics. I am not tooting my own horn here, but I have taken the time to understand the metrics deeper than most analysts as well as investors.

Problems arise when people put too much faith in a single analyst, article, or opinion.

The analysts are not alone in puting out information that is not accurate. The press, and blogs sometimes miss substantially as well.

[relmor2003]

Relmor.....

Most analysts cover several stocks. Because of that they do not have the time to dive into the metrics. I am not tooting my own horn here, but I have taken the time to understand the metrics deeper than most analysts as well as investors.

Problems arise when people put too much faith in a single analyst, article, or opinion.

The analysts are not alone in puting out information that is not accurate. The press, and blogs sometimes miss substantially as well.

What was funny about our agreed amount, was I didnt even know what his opinion was went i came up with it.
Now that I have a better grasp of how subs are formulated exactly, it is definately somethign Sirius knew would happen the second auto sales retracted. Why they refused to give guidance for the year. They knew it wasnt necessarily going to be because a ton of people cancelled from self pay, but their promo sub numbers were doomed.

[LIBOR/TED SPREAD]

"Most analysts cover several stocks. Because of that they do not have the time to dive into the metrics. I am not tooting my own horn here, but I have taken the time to understand the metrics deeper than most analysts as well as investors"

Tyler Savery


We all know BM is often WRONG (85% of the time) but one thing he has on you Tyler is he put himself out there (obviously too much out there), It's time for you to step up to the next level, you know more then the analysts regarding SIRIXM, you probably know more then most SIRIXM brass. You made a great call with your net loss and churn #'s it's time to leave the conservative Tyler and go out on a limb. We know you dont have your series 6,7,63, or 66 we know your not a financial planner no one is going to take legal action if your wrong (if that was the case BM would be doing 15-20).

WHAT DO YOU BELIEVE IS THE FAIR MKT CAP OF SIRIXM based on the $350M EBITDA and all other metrics? We would love to see a break down of what YOU believe the mkt cap and stock price should be, based on YOUR understanding of SIRIXM and how you get to these #'s AND/OR MKT CAP & SP based on different potential outcomes.

NOW WITH POSITIVE EBITDA WE CAN START PUTTING A MULTIPLE ON THE COMPANY AND UNDERSTAND IF THIS IS A $2B company or $20B company based on market cap.

P.S. I am a loyal SB reader and today bought my first item from one of your web ads. I also made sure I gave sirius buzz the credit on how I found their site.

[TSavery]

Johnny Irish.....

I am writing this in this thread, and will also post it in the other where you had your question.

There are very specific reasons why "parking lot subscribers" are a subset of "promotional subscribers" and should not be simply lumped in. Lumping all of these subscribers into one category is naive, and leads to misses when trying to project the performance of the company....not just in sub numbers, but the bottom line as well.

A pure promotional subscriber has a consumer attached. The importance of this is that the contracted service of the promotion is being fulfilled, and thus the dollars attached go into the REVENUE line item.

A parking lot subscriber (one that is not yet in the hands of the end user) has had the subscription paid for, but the contracted service is not yet being delivered. In the period of time before the parking lot subscriber becomes a true promotional subscriber, the payments received go into DEFERRED REVENUE. Deferred revenue is a LIABILITY.

That alone makes a substantial difference, and to ignore that is a mistake.

Now consider the impact on ARPU. A pure promotional subscriber is adding revenue to the picture. A Parking lot subscriber is not adding revenue. Parking lot subscribers contribute $0 to the ARPU metric, and therefor drag that metric down.

These reasons make it quite clear why lumping all promotional subscribers into one category is a HUGE error. I write this because if readers here really want to break down the numbers, they will have the ability to do so. I write this because there are more metrics at play than simply the subscriber number, and knowing that lets readers arrive at more realistic opinions that are grounded in the facts of how everything is panned out and considered.

[JohnnyIrishXM]

So this is where they get the deferred rev figure in Cash flow Liability of 47 mil in 1Q
up from 14 mil.in 08 1Q..Correct..Assuming it is 1 month subscription that is paid up front from OEM then it sits on lot and every month it sits is deferred 1 month rev for each Radio?when does it become part of Churn,if it does.or better lost sub?

Or is promo lost sub simply when customer doesn't pay a dime or stops paying after free month's promo?

[JohnnyIrishXM]

understand the deferred rev part and ARPU affect,but i guess the question is if the deffered rev is really lost rev for months on the lot and never recoverable,hence i saw a 1.1 billion figure in the liability part of financials,assuming that is many years of lost rev for each radio in pentration that was lost on lot?
If so it kinda skews the FCF and profit bottom line forever...Also why we could never have 100% penetration,it would be stupid and costly..

[relmor2003]

understand the deferred rev part and ARPU affect,but i guess the question is if the deffered rev is really lost rev for months on the lot and never recoverable,hence i saw a 1.1 billion figure in the liability part of financials,assuming that is many years of lost rev for each radio in pentration that was lost on lot?
If so it kinda skews the FCF and profit bottom line forever...Also why we could never have 100% penetration,it would be stupid and costly..

I now see why that is true. I agree. 100 percent penetration right now would be a disaster to their bottom line. Short term anyway, at least. If retention is over 60 percent on the promo subs, granted a substatial increase, then I would have to disagree with 100 percent being bad. The lower the retention, the dumber higher pentration becomes. If you have 100 cars, and only 30 people stick, its irrelevant how many cars are sold. Every car sold will have the same retention rate. But if only 50 cars have it, and you retain 45 of those customers, it would be a disaster to NOT have them in more cars. The higher the retention rate, the more important penetration becomes. Why am I getting horney?

[TSavery]

Once the car is sold to the end user, the value of a one month subscription shifts from deferred revenue to revenue each month until the contract is up.

When you prepay for a one year sub, your payment sits in deferred revenue as well, and each month the value of 1 months subscription is shifted from deferred rebenue to revenue

[JohnnyIrishXM]

Thats good to know because it tells me that we had only about 100k subs sign up for extended contract's(pre-pay 3years like myself)for the increase of 33mil in deffered rev in FCF to get on-line free and Best of break,we had 200k more best of subs since 4Q 08,,so i guess that is the number..

all rough assumptions on my part..

Also we need to stop accounting the subs this way,we should just go to Self pay subs for operation purposes and put promo's in a seperate catagory.

[JohnnyIrishXM]

To be clear....

The miss with promotional subscribers was dealing with the gross subscriber number taking a hit. This meant that auto sales combined with lower production led to fewer gross additions.

In other words, the supply bucket was more empty than in the past, and the self pay churn hole at the bottom of the bucket got slightly bigger. The promo churn hole (fully loaded churn) also got slightly bigger.

Now i get it,my thought process was wrong on the issue,but right in my mind how we got to 404k sub loss...just diferent accounting methods used..

Gross Subs(Water)was down and the hole in the bucket got bigger,perfect analogy..
less water(subs) left in bucket..