Talk about a company that’s made an amazing comeback. Despite seeing new competition from smart phones and online streaming, as well as illegal downloading for that matter, Sirius XM ended 2010 by surpassing 20 million subscribers. Sure, we already reported that back in December, but DigitalMusicNews.com recently brought a new interesting fact to our attention: the satellite radio company currently has more subscribers than Netflix!
While the on-demand video streaming company also finished the year with just over 20 million subscribers, Sirius XM currently has 20.19 million subscribers, making them the second largest subscription media platform (right behind Comcast). Granted, this victory is surely going to be short lived since Netflix is constantly growing. However, it’s pretty astonishing that Sirius XM has been able to accomplish such a feat considering that just two years ago they were reporting major declines in subscribers. Pretty great news for the satellite radio company many considered as good as dead in the past.
Back in October, we reported that Sirius XM had ended their third quarter with almost 19.9 million subscribers and was expeted to reach 20 million by the end of the year. Well as of this past Tuesday (November 30), the satellite radio company has indeed surpassed 20 million subscribers.
Sirius XM CEO Mel Karmazin released the following statement on breaking the record number of subscribers in satellite radio history:
“Reaching and surpassing 20 million subscribers is a significant milestone for us. We have added the last 10 million subscribers faster than the first 10 million — despite a tremendously competitive environment — representing a strong endorsement of our service and our programming by discerning consumers who want and demand the best in audio entertainment. As a leader in audio entertainment, Sirius XM has assembled the best content, personalities, and entertainers that satisfy our subscribers’ diverse interests.”
This is a pretty amazing accomplishment for Sirius XM. Advancements in online streaming and smartphones have provided people with more choices for listening to music, not to mention the dent that illegal downloading has made in the music business. So the fact that people are actually paying for a subscription to satellite radio is remarkable and optimistic news for a struggling industry. Plus, considering that just a year ago Sirius XM loss close to 500,000 subscribers, this is a major turnaround for satellite radio.
[via Yahoo! Finance]
People have been declaring satellite radio over since before the satellites even launched. Whether it was competitors like Pandora and smartphones, the internet coming to cars, terrestrial programmers refusing to believe people would pay for radio, the service has always had its detractors. However, none of that seems to matter, as SiriusXM ended their third quarter with almost 19.9 million subscribers, 1.3 million more than they had last year at this time. According to Digital Music News, they’ll reach the 20.1 million mark by the end of the year.
That’s impressive for a lot of reasons. First of all, the rise of Pandora and increase in radio due to smartphones isn’t something to be taken lightly. Online listening has blown up in the past few years, and all you need is a data plan for your phone to enjoy it, which most people already have. Secondly, this time last year, SiriusXM was mourning the loss of almost 500,000 subscribers for the first three quarters of the year. For a country that’s in a recession (or was until June of last year if you believe experts), to have more people willing to pay money for quality radio programming is encouraging. And with the sad, slow decline of record sales due to file sharing, it proves that people will still pay for music.
AllAccess.com is reporting that Sirius XM has added 583,249 net subscribers in the second quarter of 2010. This has lead to the satellite radio company to end the second quarter with a record-high 19,527,448 subscribers. This is a huge increase of more than 1.1 million subscribers from June 30, 2009.
CEO Mel Karmazin states:
“Our subscriber results mark the best quarter of gross additions, deactivations and net additions since the merger of SIRIUS and XM in July 2008. The strong execution in both adding subscribers and retaining them resulted in our record-high 19.5 million subscriber milestone, despite continued economic uncertainty. The further improvement in our guidance reflects the attractiveness of satellite radio but maintains a cautious outlook for continued improvement in the economy.”
This is good news for a company that has definitely been struggling in the past few years. But as Karmazin says, they still need to take caution. With online radio coming to dashboards (and already available on smart phones with car adaptors) a struggling economy, and the possible exit of Howard Stern at the end of the year, SiriusXM definitely still has a lot of work ahead to ensure a longer future. But this report is definitely encouraging.
While satellite behemoth SiriusXM is finally starting to make money, their stock price isn’t showing signs of life. In fact, the company is planning on asking NASDAQ for some more time before they delist them from the stock exchange. While the company’s stock has risen by more than 50%, it didn’t meet a requirement stating that stocks have to remain above $1 for 10 days straight before March 15. Stock is currently trading at .90/share. The company had said last month that if they received a delisting notice from NASDAQ, they’d ask for a six month extension. Chief Mel Karmizan stated the following via conference call last month:
“There is absolutely no concern about SIRIUS XM continuing to be listed and traded on NASDAQ and if successful in meeting NASDAQ’s dollar bid requirement, we have no plans to execute a reverse split.”
For SiriusXm’s sake, lets hope there is no need for concern.
radio company SiriusXM has just posted their first quarterly profit since the two companies merged in 2008. Billboard.biz reports that thye posted a fourth quarter net income of $14.2 million. They had lost $245.8 million in the same time period a year ago. And if you bought stock in the company back then, you’re doing great. They had been as low as 5 cents/share last year, around the same time they almost had to declare bankruptcy. Stocks ended the day at about $1/share today.
There’s better news ahead for SiriusXM as well. While the recession isn’t over yet, car sales are starting to pick up. Many new cars come with a trial subscription to the satellite company, whose rock channels include Liquid Metal (what up, Jose?) and Octane, as well as Hair Nation and the ‘classic rock that rocks’ channel Buzzsaw. Since those cars sold count as subscriptions, that’ll help as well, and SiriusXM expects about 500,000 more subscriptions to their already-sizable 18.8 million they ended 2009 with.
About two years ago, ratings company Arbitron released a study of satellite radio ratings showing that Sirius and XM had about 17 million listeners. They’ve just released another study claiming the number has more than doubled, to over 35 million listeners. That’s great news for our friends at SiriusXM, but the study contains even better news when looking at the demographics and listening habits of their audience.
The respondents said that they spend 64% of their time listening to SiriusXM, as compared to 16% for AM/FM radio, 10% via mobile devices and 4% via streaming Internet. 71% listen in their cars. Also, they’re richer and more educated than terrestrial listeners, too. 56% of SiriusXM listeners are college graduates, as opposed to 24% for AM/FM listeners and 25% of the general population. Also, 24% of their listeners have household incomes of $150,000 or more, as compared to 9% of AM/FM listeners and 9% of the general population.
While it stands to reason that people willing to pay for satellite radio might be a little richer than those that don’t, but this is still a pretty enlightening survey. There haven’t been specific studies for the Liquid Metal channel, but it’s still pretty exciting to know that 35 million people could be listening to it, and even if just a fraction tune into the metal channel, it’s still one of the biggest potential audiences for metal 24/7.
One of the FCC’s stipulations for allowing Sirius and XM to merge last July was a three-year price freeze on subscriptions, but that doesn’t mean subscribers won’t be paying more. Orbitcast reports that the average SiriusXM bill will go up approximately $2 a month, as satellite radio music royalty rate increases will be passed along to the consumer.
The charge will be issued as an additional fee rather than a simple subscription rate increase under terms allowed in the merger agreement after July 29, 2009. Until now, the broadcaster has been absorbing the rate increases. SiriusXM’s royalty rates, issued by the Copyright Royalty Board, are scheduled to increase annually until 2012.