Sirius(ly) Dependant on Stern

| About: Sirius XM (SIRI)
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Rob Zenilman submits: On Sirius' Q2 conference call, CEO Mel Karmazin discusses Howard Stern's impact on subscriber growth:

Eileen Furukawa- Citigroup

Just a follow-up question. You showed pretty strong retail market share gains in the quarter and I am just trying to understand what you think were the primary reasons for this success? Do you think that inventory issues at XM played a big role at all in this quarter? Or was it continued demand from Stern heightened by the Internet launch? Or was there something else you think was a primary driver to large market share gains at retail?

Mel Karmazin

I think you can make your own judgments by going into Best Buy and Circuit City and taking a look. Every time that we go in there, we see our competitors product there. We believe that the reason for our share is what we have been saying for some time, and that is that our high level of consumer awareness, high level of this unaided awareness, having the best content on radio largely driven by Howard Stern.

Again, the time that people spend mostly listening to the radio is when they are in that car and in morning drive time. The fact that we have attracted the number one radio personality in the history of radio to Sirius on an exclusive basis where he is not available anywhere else and where they can listen to him driving to work and driving home from work is going to be a big deal each quarter.

We don't think that, like many analysts have said, there is a Stern effect for one quarter or maybe two quarters. We believe that Howard and the rest of our content is going to have an impact on our subscriber growth forever, as long as it is there...

Barton Crockett - JP Morgan

Thank you very much for taking my question. I wanted to ask you a little bit about your retail outlook for the fourth quarter. In particular in the year ago period you guys had a very strong quarter with Howard Stern coming on and all the publicity surrounding that.

I know he remains popular at this point, but in your guidance, do you believe that your retail gross adds year-over-year in the fourth quarter will grow, or is there potential that we could see a bit of a decline there? And then as we look into the first quarter of next year similarly with the Howard Stern comps, do you expect you can grow retail gross adds or will that start to ease against the comps? Thank you.

Mel Karmazin

... I can assure you that Howard Stern is mobilized for an aggressive campaign in the fourth quarter for Howard to bring on some of the fans that he had, that have not yet made the conversion to satellite radio. So unlike last year in the fourth quarter, we did not have Howard Stern officially selling for us. This year we will have Howard selling for us.