XM Adds 1.7 Million Subscribers In `06(Stock dropped 50% last year)

RadioandRecords.com ^ | Jan 5, 2007 11:42 AM ET | Mike Boyle

[MovementConservative]

Based on preliminary results, XM Satellite Radio Friday morning (Jan. 5) reported that it added 1.7 million new subscribers for calendar year 2006 -- 442,000 coming in Q4 -- giving them a total subscriber base of 7.6 million.

XM also reported in its preliminary results that it achieved positive cash flow from operations during Q4 `06.

"XM completed another year of significant subscriber growth, despite retail softness, and did so with continued cost controls, achieving positive cash flow from operations during the fourth quarter," said XM CEO Hugh Panero in a release.

Earlier this week, competitor Sirius Satellite Radio said it ended 2006 by meeting its latest Q4 guidance with about 6,024,000 subscribers, which is an 82% increase over its 2005 year-end finish of 3,300,000 subscribers.

Both XM and Sirius will be reporting full Q4 results in February.

[MovementConservative]

[Always Right]

The best hope for Sirius and XM is to merge or hope the other guy goes under. Just does not seem to be enough support for two competeting companies to exist. But Congress will probably not allow the merger.

[MovementConservative]

If they merged then the single company would have a monopoly and be able to charge whatever they wanted.
I believe what Sirius and XM are finding out is that the first 7 million subscribers were easy. The next 7 million don't see the same need for satellite radio.

[Thermalseeker]

The next 7 million don't see the same need for satellite radio.

I'm in that group of 7 million. I love my XM, especially on long trips. I just wish Rush would sign on.

[italianquaker]

Me too

[newheart]

I'm in the first group of 7 million, too. I love it, although I have to confess it is pretty much a subscription to Fox News because it is on that channel the most.

[goodnesswins]

Yes, we like it too....especially in our travel trailer on vacations in the woods. Rush CANNOT do it....it would cannabalize his other contracts with radio stations.

[Constitution Day]

XM bump!

I seldom listen to over-the-air radio anymore, unless it's to catch Rush, or an NC State basketball game that's not being televised.

[Atlas Sneezed]

I just wish Rush would sign on.

---

Longshot prediction:
When Rush "signs on" it will be by buying a controlling interest in whichever network is faltering near bankruptcy and worthlessness, instantly multiplying its value overnight, most of which goes into his own pocket.

[kjam22]

My longshot prediction...... put Sirius in your Roth and it will be worth a lot of money in about 15 years.

[Tanniker Smith]

I bought some Sirius stock before Stern signed on (actually, the deal was pretty much done), so i paid a little more than I should have and then I watched it plummet. Actually, i thought it was a bargain compared to XM which had already had it's run-up (and drop off).

I lost money on paper (not a lot, I didn't put much in), but I think it'll turn around.

Satellite radio is in its infancy and it will mature. Which of these two (or both) win prosper, I can't say, but I think that they both will be around for a while and soon the imitators will be starting up. We shall see.

[devane617]

I have both Sirius, and XM. IMHO, Sirius is far superior to XM in the available programming. However, both are great. If you ever listen to SatRad for a few hours, you are hooked.

[Thermalseeker]

Rush CANNOT do it....it would cannabalize his other contracts with radio stations.

I have it on very good authority, i.e., source very close to the owner of his show, that they have been looking into it for at least a year.

Lots of other nationally syndicated talk shows have signed on to XM. Rush is likely just waiting for some of his major contracts to play out.

[Omega Man II]

The stock market is no longer impressed by the "We lose money on every new subscriber, but make up for it with volume!" model of business.

[Space Wrangler]

Nah. They'll both be fine. With more and more new car models coming with one or the other as standard equipment, the subscriber base will continue to grow.

Though a merger may still happen, I don't think it is necessary to either companies survival.

I've had XM for a year and a half now, and I after having it I couldn't do without it. We just added our second radio to my wifes car as a matter of fact because she was on the verge of ripping mine out of my truck!

And as for XM stock losing so much value, I took the opportunity to load up at $11.94 a share about 5 mos ago, and it's steadily been climbing since then to over $15 now.

[Hemingway's Ghost]

My longshot prediction...... put Sirius in your Roth and it will be worth a lot of money in about 15 years.

I agree with your strategy. Even now, 6 million subscribers X $12.95/month = tons of incoming cash.

[Uncle Miltie]

I love my XM Radios. I get FOX News wherever I go, and tons of good music.

[kjam22]

Yep... I've VERY long in Sirius. Bought in for a few years in the $1 to $1.50 range. In a couple of roth accounts and a taxabe account. There is not a stock better suited for a roth. The potential that it has (I know it's high risk) matched up with the ability to earn it tax free.

Take a conservative portfolio..... and mix in a small piece with this type of growth potential. That is a good strategy.

[Hemingway's Ghost]

Great strategy, I think.

When Sirius dipped below $4 a few weeks back, I looked at it as a buying opportunity and scooped up a bunch to offset my cost basis on the lots I'm hurtin' on! I bought in at around $7, when Stern announced.

[Alberta's Child]

Here's another long-shot prediction:

Satellite radio -- like cable television -- will eventually shoot itself in the foot by incorporating the one element of radio broadcasting that drives people away from terrestrial radio today: on-air advertising.