100% OEM Penetration Doesn't Make Sirius Sense ... Yet 55 comments
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We often hear passionate satellite radio investors and fans clamoring for 100% auto installation penetration. On it’s face it may seem like a great idea, but the reality of the OEM picture is different, and Sirius XM (SIRI) demonstrated that Wednesday at their annual meeting.
Sirius XM demonstrated the dynamics of smart growth in the OEM channel, and it is a strategy that the company is focused on. A vehicle such as the Cadillac Escalade enjoys a 70% take rate. This means that 70% of those vehicles equipped with SDARS become self paying subscribers. By contrast, economy cars carry a 30% take rate. A substantial difference.
It is not only the take rate that matter, though. The length of time to see a return on the money invested is also a major consideration. Vehicles that have a 70% take rate become a “break-even” proposition after only 12 months, while the 30% take rate vehicles take 29 months to become a “break-even”.
The length of time it takes to get a return on their investment needs to be a major consideration of Sirius XM. While a subscriber acquisition cost of $61 may not seem like a big number, it becomes substantial when you multiply it by a million. In simple terms, would you rather get back an investment of $61 million in 12 months, or 29?
Right now it is smart growth that Sirius XM need more than a bigger penetration rate. Expanding penetration is great when a company is making money, and that day will come. Understanding the dynamics of the OEM picture becomes important because it is such an integral part of the Sirius XM business model.
Disclosure: Long Sirius XM Radio, No Position OEM’s
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Only See Mr. Stupid, cant tell if hes just emotional unbalanced, extremely nervous, or has a hard time sticking to decisions. Not qute sure yet. Some good posts, so very strange posts.
Frank
On May 29 06:09 PM relmar2003 wrote:
> I dont see any bashers. Damn, thought there was some fresh meat here.....
>
> Only See Mr. Stupid, cant tell if hes just emotional unbalanced,
> extremely nervous, or has a hard time sticking to decisions. Not
> qute sure yet. Some good posts, so very strange posts.
"Is there bad news about the Iphone"
"Maybe jay boy billy was right"
all these are ignorant statements meaning if it goes down the market is driving the stock down"
On May 29 06:16 PM Mr. Stupid wrote:
> Relmar, I respect your knowledge and scrutiny of Siri stock but please
> stop looking for bashers and start looking at the stock. You can
> lose focus.
>
> Frank
Frank
On May 30 10:29 AM jmsithy wrote:
> I am telling you on M onday will be the worst for this stock because
> of GM and the following reports dont put your eggs all in one basket.
> We at Alpha dont want to hear you wine as well "what just happened
> was there any bad news about Sirius"
>
> "Is there bad news about the Iphone"
>
> "Maybe jay boy billy was right"
>
> all these are ignorant statements meaning if it goes down the market
> is driving the stock down"
On May 29 05:41 PM itsjust$ wrote:
> don't you think in a year Sirius will be 3-4$, I do, either because
> of
> the reverse
> stock split will happen or Barracks Stimulus will have a phone call
>
> costing $5
On May 29 08:24 AM Come on Guys Lets get Sirius! wrote:
> You guys need to advertise for them! I have a bunch of videos up
> on youtube. if you search for Eminem Relapse, my video comes up as
> the sixth or 7th one I have over 170,000 views! I just mention how
> Eminem has his own radio station on Sirius! So many people dont know
> this and he has millions of fans across the world! Lets advertise
> for SIRIUS!! Post Videos, etc.. Just advertise!
On May 29 05:41 PM itsjust$ wrote:
> don't you think in a year Sirius will be 3-4$, I do, either because
> of
> the reverse
> stock split will happen or Barracks Stimulus will have a phone call
>
> costing $5
On Jun 02 12:36 PM shure46 wrote:
> I am going to de-bunk the myth that " institutional investors will
> not touch a stock under 5 bucks " ..... Does ANYONE really think
> that if Siri were to have some fantastic results , indicating a long
> term profitable future , the institutions would not jump in at .34
> ?????? But they would wait until the stock got to 5 bucks ??????
> Institutions may PREFER a stock over 5 bucks , but I don't believe
> for a minute , they wouldn't buy in at .34 , if there was a ton of
> money to be made ..... Rules on Wall Street are like Female Russian
> Gymnists .... They are quite limber and flexible ... and yes this
> is MVHO , but if there is ONE thing I KNOW - There are two worlds
> ..... The one that we are told exists , and the one that really exists
> ....... and in the world that really exists , rules and laws , are
> only for poor people ( occassionaly a rich person goes down for good
> copy though ) .... and yes , I am feeling very very cynical today
> ......
Updated 0 Hour(s) 39 Minute(s) ago
The FCC needs more time to hash out a plan for the newly merged satellite giant Sirius XM to slice off two dozen of its radio channels for leasing to a separate entity for public service programming and targeting the underserved segments of the national audience.
The commission today pushed the new deadline for the satcaster to implement its voluntary commitment to enter long-term leases to June 29. It is the third extension announced by the commission. The first deadline for splitting off the channels was last fall, then extended to Feb. 27, and again extended to May 29. The FCC reports that during the period, commenters "raised a number of additional concerns and proposed a range of models to implement the leasing condition." The commission’s Media Bureau "anticipates commission action on the implementation guidelines in the very near future, and thus this brief extension is appropriate," the agency said in making the extension announcement.
For months, the FCC has been receiving comments from a slew of high profile broadcasters and from media upstarts hoping to get a slice of the satellite spectrum for their very own, or just offering an opinion about what tact the FCC ought to take with the opportunity. Among the commenters have been Radio One, Entravision, Metro Radio Korea, FluteRadio, Hispanic Information and Telecommunications, and RSS Network Corp.
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Among the hardest lobbying efforts this year has been led by Malik Shakur, president of Los Angeles-based iClick2Media who has been involved in several top-level meetings with FCC brass over the way he’d like to use the two dozen channels. The former Hollywood filmmaker’s most recent meeting with Washington was a May 18 teleconference. He was joined by Manjari Prakash, advisor to iClick2Media and Michael Wahba, president of AlphaStar International Inc., and they spoke with counsel to acting FCC Chairman Michael Copps, Jamila-Bess Johnson and Copps’ chief of staff, Rick Chessen. The following day, Shakur and his attorney, Jeneba Jalloh Ghatt, of the Ghatt Group based in Chevy Chase, Md., spoke with counsel for media issues to Commissioner Jonathan Adelstein, Rudy Brioche.
According to documents filed with the FCC following the meetings, the group urged the FCC to implement the set-aside "in a manner that is mindful of small independent content producers, many of whom may have been unable to, or have tried and failed to engage Sirius XM in carriage negotiations because of their lack of influence, counsel or other reasons. Given the fact that the merger created a monopoly situation, eliminating choice of programmers, iClick2Media and AlphaStar urged the Commission staffers to adopt an approach that would enable the most amounts of content suppliers to gain carriage as possible. The venture iClick2Media and AlphaStar propose to engage, American Independent Radio, is proposing to eliminate roadblocks to carriage for small content producers, many of whom who have been unsuccessful in reaching mass markets of radio listeners, via satellite or terrestrial radio."
For months, the FCC and representatives from Sirius XM have met in Washington on various occasions to discuss how the 4% set-aside of satellite channels will be implemented. The most recent meeting was May 20 when a platoon of lawyers -- Robert Pettit, Gregg Elias, Jennifer Hindin and Joshua Turner – all from Wiley Rein LLP and Sirius XM executives Patrick Donnelly and James Blitz, all representing the satellite company, met with Robert Ratcliffe, Sarah Whitesell, Royce Sherlock, Marcia Glauberman, Rosalee Chiara, Belinda Nixon, Mania Baghdadi, Rebekah Goodheart and Elvis Stumbergs of the FCC Media Bureau, Joel Rabinowitz of the FCC Office of General Counsel, and Gardner Foster of the FCC International Bureau.
On Jun 02 12:41 PM shure46 wrote:
> What F'ing good is it to have 3-4 pps after an RS ??????
inflation).....