BusinessWeek reports that Sirius-XM may soon go away. “Sirius signed top talent-including Stern, Martha Stewart, and Oprah Winfrey-to draw in subscribers. But programming costs have triggered heavy losses.” The now-merged former competitors have been on a two-decade spending spree, paid for with Godzilla-sized credit cards. Putting a name to the pain, Sirius-XM’s looking at $1b in debt’s coming due next year, without any way (otherwise known as positive cash flow from operations) to pay off the note. Sirius claims it can continue to fund operations and avoid filing for bankruptcy by raising money from existing lenders, who will be “flexible” about an additional $350n due in May.” Hey! I’ve done that! You get yet another credit card with which to pay the minimum payments due on the old card, right? Well, good luck with that. With people around the globe tightening their belts, and iPod connectivity in cars, you have to think that the satellite radio subscription will be one of the easiest spedning cuts motorists can make. And if there is a God, Howard Stern will find himself out of work.
Find Reviews by Make:
Read all comments
I truly hope that they find some way of avoiding bankruptcy. I routinely listen to Sirius at work and in my car. MP3 players are great…..but you have no way of discovering new music if you are perpetually listening to your own collection.
@ktm
+1. I love my Sirius, and for more than just Stern. Going on long road trips listening to new and familar things without having to constantly hunt for stations is wonderful.
Hiring alleged “top” talent was their mistake. I have no interest tuning in for some idiot blowhard with nothing to say. This is why I wake and commute to my iPod or CDs.
They should’ve hired a bunch of Matt Pinfield types to DJ some of the genre/era-focused channels. That would get great exposure for the record industry’s massive catalog and cost far less than guaranteed money to “star” MCs.
The cost/value ratios for satellite radio, OnStar and in-dash navigation systems never made financial sense to me. In-dash nav systems actually decrease resale value!
http://tinyurl.com/23bvxd
Same here. I’d really miss my XM Chill 84. I may have a lot of the same music, but I don’t have it all, nor do I want to take the time to create the myriad playlists to mimic XM even if I did. Same with Rhapsody streaming throughout the home.
The cost/value ratio of satellite radio makes perfect sense to me. It costs very little and gives me great value.
I’m with ktm, radio is the best way to discover new music.
Plus your Ipod doesn’t play live talk radio.
SiriusXM should be getting bailout money from the feds.
Luckily there’s no god…
(Howard!)
My only satellite radio is in my trailer-towing truck. The truck sits when not on the road. When I have the trailer behind me, I prefer to have no distractions, so the radio stays off. As a result, I probably listened to it less than 10 hours during the truck’s break-in period and an occasional trip to HD or Lowe’s.
I keep getting lower and lower offers via email. Still not cost effective for me.
The real tragedy here is that Howard Stern would probably wind up back on regular radio where I might have to hear him as I scan stations.
Methinks it’s time for a Sirius-XM Deathwatch.
Stern is great. I got it for Stern but have really appreciated some of the financial news channels CNBC, Bloomberg and commercial free music channels.
My 2 year contract expires in March, so hopefully they make it until then.
I had satellite radio for years, loved it, and thought the same thing as others here about accessing new and unfamiliar music.
But times continue to change. There is now an almost limitless amount of material available via podcast, including every kind of music imaginable. At the very competitive price of FREE, it’s hard to beat. And wireless internet connections are coming to your car, meaning that personalized quasi-radio like Pandora, as well as endless real time content will be available everywhere.
Working out a business model to satisfy the bankers on that loan renegotiation could be a bit of a challenge.
I enjoy XM, but why would they pay money for “celebs”??
It all about music and sports.
iPod. $200
Podcasting. Free
No monthly fees and the choice to listen to what I want when I want? Priceless.
Howard Stern, Oprah, and Martha Stewart to name a few, receive much greater compensation than they deserve on Sirius. But it’s not their fault. They negotiated and received what Sirius wanted to pay them. Sirius knows they paid too much and cannot get out of the ludicrious contracts so they must borrow money for their mistakes. Sound familiar ???
If debt is killing them, C11 might solve that problem, without ending the service. Hard to imagine it disappearing altogether.
Another good reason to keep Satellite Radio alive is the airlines. I recently flew on AirTran, and they have it *free* on board! Really made the five-hour legs go by painlessly.
I love you, XM. The variety of commercial-free music channels introduced me to genres that I enjoy much, much more than the crap on FM’s “top 40” stations.
I will never go back to FM, but, sorry XM, the lousy economy has me cutting back on expenses. And I found someone new. iPod also has music I enjoy with no commercials. It’s not you. It’s me.
Part of their problem is that potential subscribers are delaying purchases, waiting to understand the XM-Sirius technology roadmap. I am afraid to buy one receiver, only to find out they are going in the opposite direction and ending service to it. The sooner they have that sorted out the more likely they’ll survive.
Oh, and Bababooey, whatever that means.
I have never understood the appeal and won’t mind seeing their deaths. How many more $ per month can I spend on data and media? None. It’s time to cut back, in fact.
But I am blessed with pretty good over-the-air radio in Seattle. The future will be HD radio or wireless internet, probably a combination of both. It will be Sync 2.5 or something.
I don’t know what I would do without my Sirius.
Wait for it. When Congress/The Messiah blow up conservative talk radio early next year, the second bill on the agenda after “card check” unionization, Rush, et al, gotta go somewhere. Hello satellite! If they can make it to May, they’ll make it.
Satellite Radio is great for talk but outside of that we live in the area of the 40gig MP3 player and countless music download sites. I.E. anyone that cares to do so can program hour upon hours of personal music formats right at home and than play it in the car for no extra charge.
In regard to talk radio most of the best stuff still is broadcast on good ole regular AM/FM radio for FREE!
Now add into the mix Digital FM radio with its one time charge for the equipment and XM/sirrus is not looking so necessary.
Yep, typical US corporations with freaking idiot, moron CEO/management. As in, “I’d say that monkeys could do better, but that would be an insult to all of the monkeys around the world.”
THESE GUYS HAVE HAD OVER A FREAKING YEAR TO PLAN FOR THEIR EVENTUAL MERGER.
I’m a previous XM subscriber. I would CONSIDER adding a combo XM/Sirius receiver to my current vehicle, “should they ever come up with the new plans they’ve promised over the past year, along with new equipment to receive it.”
How long ago was everything “finalized?” Six months ago? Longer? I haven’t heard ANYTHING.
There is no way in freaking hell that I’m going to buy an “old” XM receiver.
There is no way in freaking hell that I’m going to pay one freaking PENNY to support Howard “Ooooh, lesbians!” Stern’s half-billion-dollar paycheck.
If they can give me a “choose your own music channels” plan, and some equipment to buy that’ll make it happen, I’d buy it TOMORROW. But no, it looks like they’ll just follow the Big 2.8 right down the toilet.
The sheer idiocy of these multi-millionaire CEO’s is just ABOMINABLE. Maybe it’ll be worth a worldwide depression if it’ll wipe these idiot morons out of business.
ktm wrote: “but you have no way of discovering new music if you are perpetually listening to your own collection.”
The new iTunes’ Genius feature finds new music based on music you already listen to (and like presumably).
Anyone know if the satellites can be repurposed? Nationwide wi-fi would be more profitable than talk and music.
Too bad about this situation. Met the original mgt. of XM over 10 years ago and arranged some of their initial equipment financing. I believed in their business model until they got into a content weapons race with the much inferior Sirius. Could never understand why they chose to compete with them that way. And certainly was befuddled by the merger, since Sirius was behind them technologically, subscriber-wise, etc. What a FUBR.
I am an XM fan, but only for news and music. Who cares about celeb shows? What a waste. XM’s original projections showed positive cash flow at 4-4.5 million subscribers. But the costs just kept going up and the needed subsciber base increasing. Mismanagement, in my view.
GOD, please, no!! My XM is the only way I can listen to Randi Rhodes and Ed Schultz! Loss of XM will send me back to local radio, which is owned by Clear (ugh) Channel! Besides, I get real Jazz & other great stuff!
If they go under, I hope it isn’t before Internet radio is available in cars!
While we do live in an era where iPods and their ilk are easily accessible there are a couple major points of MP3 players vs. XM/Sirius –
1 – You have to buy the iPod/MP3 player/whatever. At several hundred dollars for any decent hard drive based unit, that isn’t chump change, and is several years worth of subscription based satellite radio. Maybe I am a dinosaur, but I don’t own a portable MP3 player as I see no real need for it. I do still use my portably CD player and minidisc player however…
2 – You have to pay per song for MP3 players. If you want high quality audio (many podcasts are amazingly crappy sound-wise) and you don’t want to risk the ire of the RIAA lawyers you have to pay in the neighborhood of 99 cents per song. So, for the same price as a month of all you care to listen sat radio, you get about 1 CD worth of MP3 music.
3 – There is a ton of variety on satellite radio not easily found on MP3. Three of my favorite channels on Sirius are devoted to playing broadway showtunes, hard to find jam band music, and deep album classic rock tracks 24/7. Good luck finding all of that for sale in MP3 form.
Also – as to the comment above about nav systems lowering car resale value, read the article that Autoblog linked from. It states that the price of a nav system depreciates faster than the rest of a car (big surprise, technology always depreciated fast) but a car with a nav system is still worth more at resale than one without.
I have Sirius in my home, office, car, & truck and would really miss it if it were to go away. No need to download or go into the trunk to load the CD changer, just turn on the radio. Its a lifesaver on road trips, especially in the boonies were the only station is a polka channel. There is more commercial free music than you could ever listen to (over 60 channels) and great talk shows and sports. Its worth every penny for the subscription.
I think the problem at the moment is the merger has caused a conflict with the equipment which has slowed sales & subscriptions. Once the equipment is straightend out so it will receive Sirius and XM or a combination of both, subscriptions will increase.
You can say what you want about Howard Stern, but he took Sirius subscriptions from 600,000 to over 8 million in just over 2 years and basically forced XM to merge with them.
Oh, and Bababooey to y’all.
The criminal part of this merger was the XM management selling out to Sirius. Why? Sirius is completely dependent on Stern. And his contract will soon be up. I doubt that he’ll take a pay cut. So that means another huge contract that pushes off break-even for another decade. The first Stern contract at least added a few million of his fans. A second contract will mostly be about keeping them, not adding vast hordes of new ones. That really reduces the cost benefit ratio.
XM should have stuck to music. Dumped Oprah and sports to keep costs low. So what if Sirius passed them in overall subscribers in another year or two. Having more subscribers is meaningless if you never make a profit and end up bankrupt.
I would really miss the ability to hear any NHL game being played (xM) and the new music channels are wonderful.
But….I have an independent FM station that plays great new music locally, and an iPod. So the pain would be short lived.
I want to find out more about the possibility of re-purposing the satellites as Wi-Fi providers. That seems, on the surface, to have a much better chance at being a valid business model.
Some people drive for hundreds of miles a day as part of their job. The options provided by satellite radio are peerless.
I chose XM over Sirius because XM did NOT have Howard Stern.
So XM sold out to Sirius? What amazing but typical incompetence. Are they graduates of the GM school of management? Seems so.
I’ve been a subscriber to XM since before they had a million subscribers. I thought it moronic to spend huge sums to get sports and Oprah on satellite when they did it, and it certainly looks moronic now. Of course I listen to none of these, but I still get to pay for them.
XM was worth 9.95$ a month when I started, was certainly worth the 7$ or whatever when I had a two year contract, but is barely worth the 12.95$ I pay now and won’t be worth a penny more.
So go extinct. You deserve to.
Xennady :
October 25th, 2008 at 8:15 am
I’ve been a subscriber to XM since before they had a million subscribers. I thought it moronic to spend huge sums to get sports and Oprah on satellite when they did it, and it certainly looks moronic now. Of course I listen to none of these, but I still get to pay for them.
The misdirection of this argument always gets to me. I am willing to bet that the majority of satellite radio users who complain about spending big bucks on Oprah, Stern, Stewart, sports, whatever, listen to a few channels that aren’t exactly mainstream. The big names are what draw in enough subscribers to pay for the fringe music channels and give satellite radio the variety it has.
It’s the same situation as cable television or collegiate athletics, lots of channels and teams don’t bring in any income, but the ones that do subsidize the rest.
A majority of Howard’s pay was in Sirius stock. I believe the stock price was around $4.00 then and if you look now, the stock price is around $0.40 and I bet thats how the other big names like Oprah got paid so essentially, Sirius or XM didn’t lose any money on the deal, it was Howard and the shareholders.
One other thing. Why the fuck do people have to argue about stupid shit. If someone wants to pay $12.95/month for something, who is it for someone else to criticize that? It is that person’s prerogative to do whatever they want. I could give a shit if someone else uses his/her iPod with their panzy ass podcasts downloaded on it in their car or some other asshole prefers to listen to “free” radio and all the bullshit commercials that they play after playing 3 songs that they just played an hour ago with 30 minutes of commercials in between. I have satellite radio, an ipod, my car radio, my cds and I use all of them. Does anyone give a fuck about me? NO. So to each is own
I have XM and love it, on 9 – 14 hour drives I do, I hear TONS of new music that I have purchased. I have a portable music player, but prefer XM much of the time because I can listen to so many Genres and hear new stuff all the time.
To each his own I guess, I am willing to pay the fees, for now.
My only gripe would be XM selling out, and getting rid of Fungus for GAH, a 24/7 AC/DC channel!!