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Chrysler Bankruptcy Bad News For SiriusXM

Posted by on May 12, 2009

siriusWhile the collapse of the American auto industry is often depicted as the sign of a coming economic apocalypse, let’s not forget how it directly affects a music business entity. Sirius and XM have always depended on deals with carmakers to bring in new subscribers as satellite radios became standard features on new cars.

With Chrysler’s recent filing for bankruptcy, SiriusXM loses a major contributor to its growth. According to PaidContent, Chrysler accounted for about 900,000 new subscribers in 2008, or 16% of the company’s total gross new subscriptions.

After the bankruptcy proceedings finish, Chrysler will re-open its plans, so they may still contribute to SiriusXM’s new subscriptions in 2009 (though obviously to a much lesser degree). SiriusXM said in its earnings call last week that their agreement with Chrysler could be rejected completely as part of the proceedings, though it has no reason to believe such a rejection is likely.

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Categorised in: Gloom And Doom