Joe F.

Sirius, XM Complete Merger; Investors Still Blue

Great article Tyler, thanks for all you have contributed during this time.

Here's some additional points.

According to Mel on CNBC this morning there's only one subscription service with more than 18 million people today and that's comcast. He also said there is only one radio company with more listeners today and that would be clear channel

Each year, just based on the OEM auto channel alone they'll add about 2 million subs a year each paying roughly $120. That's an additional 1/4 billion of growth per year.

Right now, based on the current 18,000,000 subs they bring in over 2 billion a year and this doesn't factor in any of the growth from the following:

1)

Look for a Music library from the combined entity that dwarfs the itunes selections with minimal additional royalty arrangements. Look for high end tiers that will include 2 or 3 free downloads / month with your subscription. Library will be open to anybody for $.99 / song.

2)

Look for advertising revenues to bump up significantly given the 20 million audience and rising. Also look for 100% penetration, sooner rather than later, as OEM installs increase across the board.

3)

Watch for a clear strategy involving branding and a huge retail push across new hardware for the upcoming holiday season.

4)

This service will soon be re-invigorated on the desktop with new Operating System software.
OEM loaded this software will enhance the capture and delivery of streaming across devices such as the iphone and the new handsets from Nokia and Samsung, extending it's reach over multiple platforms.


5)

Look for this desktop software to include a Pandora like option, relative to the new library, that will be delivered via a streaming format. Structure will either be advertiser sponsored or subscription based.

6)

Be ready for Sirius to challenge Clear Channel, over time, relative to concert promotion and on demand broadcast of concerts nationwide. Both live and recorded. Look for them to include and share revenues with the artists regarding downloads of entire venues.


7)

Watch for expanded video offerings and GPS inclusion in new car installs.


8)

Look for expansion in Western Europe beginning with Britain in 2010 / 2011


IT IS A CASH COW THAT IS ABOUT TO CUT IT'S OPERATING EXPENSE BY JUST UNDER 1/3. IT HAS HUGE AVENUES FOR GROWTH BEYOND THE ALMOST GUARANTEED 10% / YEAR. EACH SUBSCRIBER FLOWS ALMOST COMPLETELY TO THE BOTTOM LINE GIVEN THE NOMINAL COSTS ASSOCIATED WITH HOOKING THEM UP AND DISTRIBUTING THE NETWORK TO A NEW CLIENT. THIS INCREMENTAL REVENUE WILL JUST PILE UP.

IF THERE IS ONE GROWTH STORY LEFT YOU ARE STARING IT RIGHT IN THE FACE! AN ABSOLUTE 10 BAGGER. ESPECIALLY BECAUSE EVERYBODY CURRENTLY DOUBTS IT.

END OF STORY.