Sirius XM Still Shedding Customers, Albeit More Slowly
By Ed Oswald | Thursday, August 6, 2009 at 6:44 am
Sirius XM continues to bleed customers, although at a much slower pace than the first quarter of this year, numbers released Thursday morning show. The satellite radio provider shed 186,000 customers in the second quarter, an improvement from the 404,000 customers it lost in the first.
Regardless, the satellite radio provider is still losing customers, the wrong way to go when you’re already struggling to make money so as it is. Pro forma revenue was in at $608 million, which was a 1% improvement year over year. Losses were $171 million, an improvement over last years $203 million loss.
Some of this improvement can be credited to a further reduction in subscriber acquisition costs, now down to $57 from a year ago. Additionally, monthly average revenue per subscriber edged up 11 cents to $10.66.
It is also continuing to pull a bigger profit from operations, now up to $132 million in the current quarter.
There is still trouble ahead for Sirius XM however. Beginning this month, a $2 royalty fee at minimum will be tacked on to every subscriber’s bill. It will be interesting to see the effect this may have on subscriber numbers. If we see a worsening again in the third quarter numbers out this fall, we’ll know the likely cause.
Regardless, the company must keep a hold of its customers. All this improvement can easily be stymied or wiped out if the company has an increasingly smaller base of customers. The biggest thing now is focusing on keeping current customers happy.
Programming — which from the looks of things appears to be Sirius XM’s weak spot — is job one. It’s clear that many are not responding to the “FM-plus” strategy carried over from Sirius, and much rather would prefer deeper playlists, which was XM’s biggest strength.
I’m reserving judgement until next quarter whether this merger can ever be a success. I’m still not sure yet.
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August 6th, 2009 at 7:23 am
What do you mean programing is their weak spot? They have the best programing out there….that’s why people pay to listen to it. I don’t think a $2 fee is going to make that much difference. People pay $100+ for cable tv for the programs and still get all of the commercials with it. I think with the naked short sale “fix”, the cash for clunkers program, the iPhone app, and all of the smaller bits of good news that they’ve come out with in the past few months is just the beginning of their climb to the top. I am a stock holder. I don’t have sirius in my car (because it was not installed when I bought the car). But I am getting an iPhone and the first application being downloaded is going to be Sirius. So, they can add me to their subscriber list for Q3.
August 6th, 2009 at 8:00 am
I cancelled yesterday. Intended to cancel last month, and when I called, they eventually promised me 3 months free – no catch. I wouldn’t hear from them again until October, when they’d simply send me another letter reminding me that my subscription was up.
Yesterday I got a bill from them – for three months’ service. I cursed a blue streak at the Indian front-liner, then the American.
“Climb to the top,” Siriusly? Not with that kind of customer support.
August 6th, 2009 at 8:25 am
There is a DVD movie out about the whole Sirius XM/Mel K. story called: Stock Shock.
Very good flick and explains stock market manipulation as well. Stock Shock is at amazon.com and stockshockmovie.com
August 6th, 2009 at 10:20 am
We were early adopters of XM, but they’ve gone so far downhill in the last year that the news of the surcharge just makes it that much easier to pull the plug.
August 6th, 2009 at 11:41 am
I had been a Sirius subscriber from day one. I used it everyday even after the two SR companies merged. They just did not do early subscriber any favors for their loyalty. The only reason I stayed was to see what would happen with the merger. I would have been very happy if they would have offered a U-Pick selection for a flat rate, but no get the “Best of XM”. I just wanted the MLB package to go along with the NFL and college football. I would have needed to also purchase two new devices to replace my Sirius devices. No thanks. Instead I purchased the MLB package from MLBTV and the MLB iPhone app. I am happy, do not miss Sirius at all. I now listen to podcasts that I pick at no charge. Thanks for the merger. I am happy.