Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
It was stated by Mel Karmazin at the Citi conference on January 4th.
“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.” - Mel Karmazin
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
crunching....
We do know that the new car channel did not have sales or production on a level that would deliver subs.
We do know that retention and discounting efforts were heavy.
We do know that the company stated that the used car market had a significant impact.
We do know that retail has been virtually meaningless for a few years now.
New car dealers tend to keep the quality used cars and auction off the lesser quality cars. There are just over 20,000 new car dealerships in the U.S. There are 40,000 used car dealerships. The deals Sirius XM has are with new car dealers. Thus we have about 10% coverage of new car dealers that tend to sell quality used cars.
The 1:1 ratio may be off. It will take some time to adjust the model, but we have to start somewhere.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
Iwould look at that as getting data for less money:
$25 for 2GB is $12.50 per GB $30 for 3GB is $10.00 per GB
I have maintained for a long time that data prices will drop. Verizon had a "double the data plan" for a limited time, and now prices 2GB at $30. Looks like the pricing wars are beginning
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
That point may come, but it is a long way off in my opinion.
I would say it has phenominal appeal to some customers, but nowhere near the majority. Not even Pandora has that, and they are on fire!
Consider this.....Pandora is adding 3 million active users in a quarter. That is 33,333 per day, and still only breaks down to 667 users per state per day being added. Sirius XM is adding 300,000 self paying users per quarter. That is 3,333 per day and breaks down to 66 per state per day.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
paku.....
The three year plan would add about $570 to the cost of a car. Auto makers are extremely competitive and that type of cost would likely take away sales.
Consider this.
If you owned a coffe shop and sold Cuban coffee (a very strong brew) $2 per cup and serve a breakfast special at $10 that includes regular coffee as well as cuban coffee.
You give away a cup of cuban coffee to every customer and find that 55% do not care for it and want regular coffee. You then find that over the course of a year that 25% of those who did want more cuban coffeechange their mind and now say they don't want it.
Thus, out of 100 customers, 55 do not want it and 12 try it longer but decide against it.
That means 67% of your customers have no interest in the cuban coffee, and tell you not to serve it to them.
Does it then make sence to raise the price of your breakfast special to $12 and serve it to these people anyway?
From a simple business perspective, the numbers would dictate that you do not do that.
You need to think of this from the perspective of Ford, GM, Mercedes, Toyota, etc. They are not interested in making their product more expensive in order to make Sirius XM Happy.
Now certainly they could facilitate a three year subscription as an option, but that has its own challenges.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
Michael.....
Lease cars have the typical terms that new cars have.
The concept of building the subscription into the price seems good, but functionally it will not be likely to happen. The issue is that automakers would then have to increase the price of their cars to cover the expense and more than half of the people do not want the service.
There are limited times when certain models will offer up long term satellite radio, and that is likely the most we will see.
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
So now lets put numbers to the issue instead of headlines.
If January sees auto sales of 950,000 do you consider that good?
What about 1,000,000?
What about 1,050,000?
Certainly auto sales will be above last year. We all know that. However, January will not really tell the yune of 2012. That was all this article was saying.
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
mmzo8....
Explained above. Yes, I am long SIRI and have been since the company had less than 50,000 subscribers. Being long does not mean that I lose objectivity
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
“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.” - Mel Karmazin
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
Bottom line.....data is getting cheaper, and standard plans now have more data.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
We do know that the new car channel did not have sales or production on a level that would deliver subs.
We do know that retention and discounting efforts were heavy.
We do know that the company stated that the used car market had a significant impact.
We do know that retail has been virtually meaningless for a few years now.
New car dealers tend to keep the quality used cars and auction off the lesser quality cars. There are just over 20,000 new car dealerships in the U.S. There are 40,000 used car dealerships. The deals Sirius XM has are with new car dealers. Thus we have about 10% coverage of new car dealers that tend to sell quality used cars.
The 1:1 ratio may be off. It will take some time to adjust the model, but we have to start somewhere.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
$25 for 2GB is $12.50 per GB
$30 for 3GB is $10.00 per GB
I have maintained for a long time that data prices will drop. Verizon had a "double the data plan" for a limited time, and now prices 2GB at $30. Looks like the pricing wars are beginning
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
I would say it has phenominal appeal to some customers, but nowhere near the majority. Not even Pandora has that, and they are on fire!
Consider this.....Pandora is adding 3 million active users in a quarter. That is 33,333 per day, and still only breaks down to 667 users per state per day being added. Sirius XM is adding 300,000 self paying users per quarter. That is 3,333 per day and breaks down to 66 per state per day.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
The three year plan would add about $570 to the cost of a car. Auto makers are extremely competitive and that type of cost would likely take away sales.
Consider this.
If you owned a coffe shop and sold Cuban coffee (a very strong brew) $2 per cup and serve a breakfast special at $10 that includes regular coffee as well as cuban coffee.
You give away a cup of cuban coffee to every customer and find that 55% do not care for it and want regular coffee. You then find that over the course of a year that 25% of those who did want more cuban coffeechange their mind and now say they don't want it.
Thus, out of 100 customers, 55 do not want it and 12 try it longer but decide against it.
That means 67% of your customers have no interest in the cuban coffee, and tell you not to serve it to them.
Does it then make sence to raise the price of your breakfast special to $12 and serve it to these people anyway?
From a simple business perspective, the numbers would dictate that you do not do that.
You need to think of this from the perspective of Ford, GM, Mercedes, Toyota, etc. They are not interested in making their product more expensive in order to make Sirius XM Happy.
Now certainly they could facilitate a three year subscription as an option, but that has its own challenges.
Is Sirius XM Really Worth $3 A Share? [View article]
Good and well rounded piece. Certainly you will field a lot of complaints about it, but that comes with the territory.
What many do not understand is that Sirius XM already trades at a high multiple. Yet somehow these people want and even expect a higher multiple!
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
Lease cars have the typical terms that new cars have.
The concept of building the subscription into the price seems good, but functionally it will not be likely to happen. The issue is that automakers would then have to increase the price of their cars to cover the expense and more than half of the people do not want the service.
There are limited times when certain models will offer up long term satellite radio, and that is likely the most we will see.
Opportunity For Sirius XM As U.S. Cars Get Older: Stay Tuned [View article]
Thank you for the kind words. As each year passes we will see deeper penetration (satellite rado equipped cars) in the used car pool.
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
If January sees auto sales of 950,000 do you consider that good?
What about 1,000,000?
What about 1,050,000?
Certainly auto sales will be above last year. We all know that. However, January will not really tell the yune of 2012. That was all this article was saying.
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
Thank you for the kind words
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
Retention efforts were heavy in the quarter. When we see the numbers we will be able to determine just how heavy it was
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
I have no idea why a comment was removed. I do not control the comments.
Options Friday had nothing to do with this article.
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
Do you want to discuss numbers or go on and on about me? I own a few businesses.
Can we move on to meaningful discussion now, or do you still want to grind your axe?
January Auto Sales Off To Slow Start - Why Sirius XM Investors Need Not Worry [View article]
Explained above. Yes, I am long SIRI and have been since the company had less than 50,000 subscribers. Being long does not mean that I lose objectivity