Well, in our previous article we said that Sirius XM Radio (NASDAQ:SIRI) management team should sprinkle "Buzz Words" throughout the Q1 2008 conference call. While the management team did sparingly utilize buzz words like iPhone, Twitter, and YouTube, they didn't give much needed new or additional details. Also, it’s always more fun for the media to focus on the subscriber decline than the successful cost cutting across the board.
Since at Rad Sat Daily we like to focus on the positive side of satellite radio (at least for the most part) and believe in the long term prospects of the company, let's discuss some of the hidden gems from Thursday’s conference call.
Hidden Gem 1 - 700,000 Subscribers to "Best Of" service
Sirius XM Radio management announced 700,000 subscribers subscribe to the "Best Of" service. This is the first time management has given any subscriber numbers around the "Best Of" service. When you consider that the "Best Of" service has only been in existence since October of last year 700,000 subscribers is a fairly nice growth rate. Based on the current growth rate Sirius XM Radio could probably expect to see anywhere between 1 and 1.2 million "Best Of" subscribers by the end of this year.
Hidden Gem 2 - iPhone Application could have new Channels not currently on Satellite Radio Service
On the call, Scott Greenstein, head of Sirius XM Radio programming based on our interpretation, very briefly mentioned new programming to be available on the Sirius XM Radio iPhone Application. Here is what Scott Greenstein said,
The SIRIUS XM app will deliver an expanded programming lineup that includes SIRIUS XM's exclusive sports talk, news, comedy, and 100% commercial free music channel, as well as new talk, comedy, and music showcase channels.
If we focus on the words "expanded" and "new" in what Greenstein said above then there is a potential for new programming to be available on the Sirius XM Radio iPhone Application or better yet, Sirius XM Internet Radio. Of course, Scott didn't go into much detail on the call.
Hidden Gem 3 - GM Deal Renegotiated
Let's face it, XM Radio previously sold its soul to GM all in the name of competition and gaining subscribers. A renegotiated GM deal extended to 2020 with better economic terms is beneficial long term to the company.
Hidden Gem 4 - Programming Changes and Price Increases Beneficial Long Term
While the programming changes/merging and price increases to multifamily and internet radio stream has been difficult for some subscribers or former subscribers, the long term financial benefits of the move is clearly noticeable. Programming costs were significantly down due to the programming changes. Additionally, the price increases will have a long term benefit to the finances of the company.
Hidden Gem 5 - Renegotiation of Programming Contracts
Some programming providers have decided to renew their contracts with Sirius XM Radio in some cases at reduced rates. Mel Karmazin on the conference call said,
Our programming providers understand the benefits of being on the SIRIUS XM platform with its million of listeners and true nationwide reach. Without exception, they have elected to remain on our platform when contracts are up, often at substantially reduced rates.
Given that Sirius XM Radio has in the past been knocked for how much it spends for programming the fact that programmers are renewing their contracts with the company at substantially reduced rates is great for the satellite radio broadcaster long term.
For now we will stop at five "Hidden Gems" found on the Sirius XM Radio conference call. Can you find anymore "Hidden Gems"?
Let us know.
Disclosure: long SIRI