Sirius XM Reports 2012 Guidance and Slides in a Price Increase
Investors were anticipating that Sirius XM CEO Mel Karmazin would issue 2012 guidance during the Q3 conference call. A surprise was delivered today when the leader of the satellite radio industry issued the guidance at a Bank of America conference. In addition to announcing a price increase from $12.95 to $14.49 per month starting at the beginning of next year, Karmazin rolled out the company guidance for 2012.
The company reiterated their 2011 guidance:
- Expecting revenue of about $3 billion
- Adjusted EBITDA of about $715 million
- Free cash flow “approaching” $400 million.
For 2012, Sirius XM issued the following guidance:
- Revenue up 10% to about $3.3 billion,
- 20% growth in adjusted EBITDA to $860 million
- Free cash flow growth of 75% to $700 million.
As with most times that Mel Karmazin issues guidance, some of this is already being seen as conservative. Many analysts were anticipating higher revenue, but perhaps some of that expectation was based upon price increases more substantial than the announced $1.54 per month. As 2012 comes into play, the key to watch is the impact of the price increase and what is happening in the auto sector.
Position – Long Sirius XM Radio
Karmazin will have another press conference when they lose a significant number of subscribers because of this increase.
um yeah your right netflix ceo will step down soon. will mel?
A subscriber that would cancel over a nearly $20 per year increase, is not really the type of customer that a subscription service wants or needs. A nickel a day too rich for you? One less nickel bag this month might be in order. Need to be concerned about your career decisions when your discretionary entertainment budget reaches this paltry threshold. 2 types of people: those who say how can I spend less money? And those who say how can I earn more money to afford the things that I enjoy? If you don’t think it’s worth paying for, don’t pay for it! Simple equation. Sirius XM continues to gain subs as we speak, I understand the confusion of those who do not pay for radio or music. Ponderous isn’t it?
Don’t be a douche.
It’s the value of the service for the price charged.
Sirius-XM is a POOR value already and this only highlights that.
I’m sorry, I can’t just stop being a douche that abrubtly, I can be less of a douche occasionally and upon request for limited periods. I’ll work on it.
Douche says ‘what’ ??
Common kid, respect SSF, he know’s MORE than you, and if you don’t think the content is worth it……….don’t pay OR invest….leave this site…………
FTR,
Sirius-XM is only gaining subscriber if you count those with free 3-Month subs from new cars.
It is completely disingenuous and false to claim they are gaining PAYING subscribers.
Their churn is as bad as ever and will only get worse.
Their churn is bad comparred to which subscription service?
FACT:
Q1 2008 there were 14.3 Million self pay subs
Q1 2011 there were 16.8 Million self pay subs
That price increase at Netflix seemed to work out really well too.
ZERO new subscribers despite the PROJECTED growth of millions.
Sirius-XM will have similar results.
What I find funny is all you SIRI nuthuggers are STILL waiting for the big upside move.
You have been claiming a big move in the stock price since Malone saved the company.
SIRI still can’t manage to stay above $2 for any length of time.
At what point will you guys admit that you are full of it?
Higher Netflix prices equals fewer subscribers
Horror show: Netflix losing more customers than expected on price hike, stock plunges 19 pct
Michael Liedtke, AP Technology Writer, On Thursday September 15, 2011, 5:09 pm EDT
SAN FRANCISCO (AP) — Netflix’s decision to raise prices by as much as 60 percent is turning into a horror show.
The customer backlash against the higher rates, kicking in this month, has been much harsher than Netflix Inc. anticipated. That prompted management to predict Thursday that the company –the largest U.S. video subscription service– will end September with 600,000 fewer U.S. customers than it had in June.
http://finance.yahoo.com/news/.....52939.html
Im thinking this info made public has S&P upgrade in the new few weeks written all over it(and refinance to lower costs)
Yeah, the need to take care of the 2013 800 Million @ 13% debt. They can easily push that out and get it down to 7 or 8% interest. They would have enough cash on hand to take care of it but could easily refi at a lower interest rate, and I believe they will.
I think it will happen in the next month or two.
That price announcement is deceiving. They don’t even address the extra license fee that is added on as well.
This is an a great time to buy SIRI anything below $1.8 should be good enough for those that can hold for 2 months. This stock will continue to go up for at least the next 4 years just look at the last 3 years chart and see the huge gains made so far.
Guys, dont be blind…. if sirius right now struggles to get just less than 2m subs per year at current prices, what makes u all think that with a price increase they will even maintain that take rate ? id say at most they will be able to add about 1m subs next year maybe just over that. Also people that are up for renewal, how many u think will cancel ? Sure they offer alot of content, but when you got pandora and slacker for less than 4$ a month and provide music channels that are 10x better than Sirius’s playlists, u think most people would consider switching ? I predict next year first half of the year Sirius loses 1m subs. Whats the price increase sucks cuz only people on the XM side will take advantage, and even then, only people that have the latest receivers this year and probably next year model years, so for them the price increase may be justifiable, but for ALL sirius subs and most XM old subs, there is no added benefit, just its a little harder to swallow this price increase, and i know, “but its only 20$ a year” well, lemme tell you, that WILL make a difference to alot of people, u like price increases ??? look what happened to Netflix stock….. in the past couple of months its down almost 40%….i think they will end the year with the same amount of subs as they started…. 0 growth…might even lose subs… anyway, flame me away guys…
Sirius Xm has to add new content in order to justify the increase. During these economic times, it would not surprise to see a signifcant amount of people will bail on this company.
I’m still annoyed that they increased rates on secondary
radios. It shows that the company does not support their customers.
You know they are adding 30 more channels right? Word is by October the spanish language channels will be up a running.
thats fine and all, but honestly I believe the area Sirius XM needs to focus on is their music channels. I honestly believe that most people (over 50%) of subs listen to music channels more than other content most of their listening time (I highly doubt someone listens to nothing but news ALL day….or howard stern all day specially since he is on so little compared to his last contract…). I particularly listen to Dance/Trance/Electro type music, and let me tell you, their channels in those categories suck…It could be so much better if their actually repeated some of the dj mix shows they run at like 1am during the day, deepen their playlists, honestly hands down slacker music channels are SOOOOOO Much better than Sirius its actually kinda embarrassing considering Sirius has more than 10x the amount of revenue…
After 5 years of active service I just canceled both my radios yesterday. In the beginning i was a strong activist for the future of sirius xm. In 2006 when i first got sirius xm i was paying $12.95 a month, a straight $155.40 for the year. Fast forward 5 years later my monthly bill is now $31.31, thats $375.72 a year. That is a 60% increase in 5 years. No loyalty discount or look in price for multiple radio subscribers. Now granted they have a lifetime subscription where you make a one time payment and you never have to pay again. but they fail to advertise only in the fine print that you can never upgrade your radio. The life time subscription is tied into the radio not your account number. Other factors that lead to me leaving the service was the increase options out there on the internet. With the recent upgrade to i heart radio and low monthly prrice of 3.99 a month for slacker radio why would i continue to pay 31.31 a month just to hear el covino talk about girls and lou brotus bitch about how he is working the weekend for someone else on octane. here are some other online radio options that match sirius xm quality of stations
-pandora
-radio.com
-tune in radio
-zune monthly pass
-lets not forgot your basic iPod
As for there sports option that i loved mostly for the baseball. Baseball is played for around 7 months of the year. But my monthly price doesnt go down during the off season it stay same. So once again why pay 31.31 a month when i can make a one time payment of $15.00 for the mlb at bat app on my iphone that plays all the games radio audio just like sirius xm.
It comes down to options, in 2005 the competiton for sirius xm was FM radio and ipods. in 2011 there competition is not only FM radio that has proven will never go away but the demand to get what you want , when you want and how you want.
Sirius xm has lost the battle for all three of those options for me. There not playing what i want, when i want.
For me right now
-slacker radio
-i heart radio
-radio.com
-audible.com
for monthly price of $12.95
doesnt compare to
Siruis xm $31.31
I will revisit my options when satellite radio 2.0 is released. but my gut leads me to believe that mel karmazine is gonna screw that up to.
Sirius XM has come to stay. If you don’t like the service per value, go the Ian’s way. Did Spencer predict Malone would make a move to buy the majority of shares last week? I have always advocated for one to do your own research, and don’t follow any body’s advice.
I did not predict that the move would happen last week. I was stating that the leash that is holding Liberty back would be removed with a win on the appeal.
I believe Liberty will make their move at some point. It is not an instant thing though
What is the outcome of the appeal?
you can switch radio’s for 75 bucks on life time sub also learn how to negotiate.
SIRIUSXM BETTER LEARN FROM NETFLIX. The merge has been a complete down turn for me. I thought I was going to get the whole package without ever paying more yeah what the hell was I thinking. I wont get the xm side even if I love my baseball. What are the numbers from people getting the sirius’s package to xm’s? Can anyone tell me? I’m a Stern fan but more people got it probably for the NFL. Netflix market value has gone down 53% in 3 months.
Sirius-XM, by treating customers poorly and doing NOTHING to get new and unique content, has screwed the pooch.
They have hit the wall and are on their way back to penny stock status.
This type of arrogance is what has killed Netflix.
Blockbuster now has new life thanks to the incompetent management.
Pandora and Clear Channel have new life because of incompetent management at Sirius-XM.
lol@BaBa