Sirius XM Adds 540,000 Subscribers In Q4 – Beats Guidance
In a conference with Citigroup today Sirius XM CEO Mel Karmazin announced that the company added 540,000 net subscribers in Q4 of 2011, a number that represents a beat of subscriber guidance by about 100,000! The company seems to attribute a good chunk of this success to the used car market which is and will become a more substantial contributor to the subscriber metric going forward.
The new car market certainly made the company capable of meeting guidance, but the numbers presented a challenge. With used car deals involving thousands of GM, Nissan dealers, as well as Auto Nation, it was only a matter of time before the impact was felt. Last quarter I attributed too much weight to the used car deals which caused an overestimation of the subscriber number. It would appear that this quarter the used car deals are finally paying off, and paying off in a way that was more substantial than I would have thought at this point.
The new used car deals have made subscriber estimation a challenge in the most recent quarters, and the announcement today by Sirius XM will certainly have myself, and analysts that follow the company sharpening pencils on the subscriber model. The big question at this point is how the other metrics break down and whether the company is keeping the value of subscribers as high as possible. The other wild card in this equation is how well the retail market is doing.
The biggest factor with this announcement is that the company has finally beaten a metric by a wide margin. This is the type of impetus that has been needed to see Sirius XM break out of a trading range and begin to move up. Of course we will have to wait until February to get all of the data points to work with, but the positive news would indicate that Sirius XM was able to add 550,000 subscribers in an economically friendly way.
you are my clown buddy. I called it you doubt it. Suck it you Schmuck!
spoken like a true d-bag. AMP grow up.
Spencer,
540K subs in Q4 is great news, no doubt. We argued big time about the number. Fortunately, it worked out much better than expected. I am not going to gloat becauase it would be simply stupid. You are the only one besides sirius xm insiders who truly understands the sub growth and follows it closely.
Now, about the lessons learned and to be learned.
1. We need to pay more attention to what Mel says and trust him a little bit more in particular when it comes to forecast or actual data. The same related to rumors about liberty acquisition.
2. I am still curious, like most likely you as well, about the “cost” of new 540K subs. How did it affect the ARPU and SAC? Where the discounts so big that we will see a negative impact on the ARPU. I would hate to see that although most of the companies go after revenue like amzon or subs like nflx at any cost. If SAC remains at $56 or lower, used car contribution should have been significant.
Also, I am curious about how many self pay subs they got in Q4.
Overall, the result is encouraging. I hope the company will be bold enough to project as hish as 1.8M -2.0M new subs for 2012. This will help tremedously.
If I were you I would not be discouraged by the rudeness of some jerks to cannot but stick it in.
2.
AMP….
Wasn’t it Satwavespro that told you Q1 of 2011 would deliver 1,200,000 subscribers when the company actually delivered 350,000? I would call that the biggest miss ever.
Wasn’t it Satwavespro that did live coverage of the Q1 call and told everyone to jump out of the stock because the company missed subscribers so bad in their opinion. The stock did very well. Somehow the replay of that cover-it-live vanished. I think we know it was beause the principle their was utterly embarassed with his call on subs and miss of the market reaction.
I stated that subs this Q would be between 430,000 and 460,000. Yep, I missed. The key is knowing what the driver was. It sounds like the used car deals are panning out now. Adjustments to models will have to be made. I spoke of that after Q3.
Remember though….the biggest miss was almost 900,000 by your hero
I’m pretty sure I heard Mel say 550k subs were added. When he talked about new subs, I wrote down 550k. Either I heard it wrong or he misspoke—-or for the sake of public announcement, maybe the release number was minimized.
In any case, it was a good number.
The PR said approximately 540,000. Outstanding number either way.
He did say 550k subs in 4Q on the call today. I wrote it down also. PR’s say approx 440k net new. I think Mel probably mis-spoke.
Can you guys read? PR stated clearly approximately $540K. How can you be so light headed about your own money?
Hey VI – don’t know if we’ve trolled the same boards in the past, and I am relatively new to Spencer’s board. Uually on the Yahoo board. Thanks for some interesting insight.
“If I were you I would not be discouraged by the rudeness of some jerks to cannot but stick it in.”
Were you referring to yourself?
Or are you just being light headed?…. People make honest mistakes.
“How can you be so light headed about your money”
I have other money to look out for. Such as running a business. I did not nor do I now have the time to read the print copy. Furthermore, I leanrned what I needed to know from the audio.
If you want to make insulting posts, you have a problem. You need to tell that crap to somebody who cares what you have to say. I certainly don’t.
“The big question at this point is how the other metrics break down and whether the company is keeping the value of subscribers as high as possible”
Spence, I don’t think I would phrase it quite that way. Its not just about keeping the “value” of the sub as high as possible, if that was the case, just keep raising prices. Its really about the trade off between ARPU and the number of subs (same as the trade off when raising prices), and whether the cost of retention in the form of discounts and a lower RPU for some temporarily pays off over the long term in higher revenues.
Its about the most effective way of increasing total revenue, over time, not just one of the metrics that make it up. Having said that, its not even about just revenue, but the bottom line because other cost factors and trades-offs get into customer retention.
So while its good to see what’s happening with all the metrics, including ARPU, a decrease or increase for that matter doesn’t tell us much without looking how all the revenue and cost factors are contributing to the bottom line.
I think you would agree, its just the way you’ve phrased it makes it sound like ARPU is the most important metric.
spence the used car market was the wild card u basically had them meeting guidence . no shame there we all wanted #’s like this it’s all good. i’ll take 550 every quarter going forward
Spencer – great news, it sounds to me. As always, everything Mel says seems to come true. I am very pleased.
Dave
This could be the start of the hype job that runs SIRI to the low $2 range thru the y/e report
spencer was absolutely right to be cautious on 4q sub guidance. we raised sub guidance a few days before the huge sell off last summer. 440k was a tall order anyway you slice it. with that said, he was wrong and that’s okay. bm is wrong all day.
$2.50 soon!
I want to apologize. I was kindly reminded by one of our members what you had basically said with respect to earnings.
“The only way for SIRI to hit their 2011 sub guidance would be for them to practically give away subs with tons of special offer programs. But when that happens, lookout for shitty ARPU numbers.”
I am quoting a member not you. Again, I apologize
not sure what you are referring to
spence mel clearly said 550,000 net subs listened to it twice
fraz….
I know what Mel said in the call….I also know what they released in their 8K and PR. The 8K and PR “about stated 540K”
Spencer, I, for one, appreciate your efforts in analyzing auto sales and how that projects out to subs for SXM. We knew the wild card was going to be pre-owned auto sales and I hope you are able to get a handle on how to project those numbers going forward. Otherwise, I totally agree with v.l’s “lessons learned” in his comment above; esp., when it comes to counting on Mel’s statements when projecting data.
mel had these subs in his back pocket. for some reason i dont trust how this is developing. with malone/ergen pulling strings in the back office. this stock smells.
………………….ultimately “We Siri-longs, perma-bulls” or whatever the Hell you wanna call us, KEEP WINNING and breaking all metrics !!
I only wish that the great minds involved here, i.e. BM, SO, would stop the intra-infra, Battles and let’s ALL work together to rape the rapers……………….
Capish ??
Draland….
BM is not someone that interacts well with others. You see, yet again today he makes it a point to try to take me down a notch. Of course, he only tells a half truth in his latest attempt. He even misrepresents what Mel stated, but then again, we should all come to expect that. Here is his latest:
“Hey hey hey! Stop being mean to Spencer! He did put up an article tonight that everyone should read!
He states that the influx of subs came from the used car channel. Of course he may be right about that.
He’s not…but he may be. you see, in the first 5 minutes, Mel stated the sub additions were a result of the OEM’s and the recovery in the new car market.
So he might be right…or he may just be too ashamed too admit he was wrong…again…and that he cost many many people a lot of money.. ”
1. This coming from the guy who called for 1,200,000 net additions in Q1 of 2011.
2. In a response to a question about where the sub number came from, new and used cars, Mel stated, “I think clearly the two drivers are the improvement in the OEM business, you certainly saw it with some of the announcements today on December SAAR. So we certainly saw a an improvement in car sales…our penetration continues to do well, and secondly, though the base is small, we are absolutely seeing a significant increase in used cars as well.”
3. Somehow Brandon wants people to believe that Mel mentioned nothing about the used car channel and how it was “absolutely a significant increase”. He would have people believe that I just pulled the used car statement out of thin air. The guy is sick and needs professional help. From what I am told he spends hours in his chat room obsessing about me all of the time. Very odd. By the way, “Great Minds” do not project 1,200,000 subscribers in a quarter when the company delivered a bit over 300,000. Perhaps you were just trying to be nice to him.