Tag Archives | Sirius XM

Sirius XM Bleeds Customers, Blame the Programming.

Posted by Ed Oswald on May 7, 2009 at 11:03 am

Despite the company’s best efforts to sugar coat it, Sirius XM is in trouble. The company shed just over 404,000 subscribers in the first quarter, as far as we can tell the first ever where the company combined or separate has done so.

Losses also widened to $236.6 million, more than double the $104.1 million loss a year earlier. Pro forma revenues clocked in at $587 million. The company did report a $108 million profit from operations, its second quarter of doing so.

The loss came as a surprise to Wall Street, which expected the company to continue adding subscribers on a much smaller loss. Miller Tabak & Co analyst David Joyce told CNBC that he believes subscriber loss will offset any gains from cost-cutting measures, a problem for the company.

We’ll give some credit to the company for reducing its costs, such as the subscriber acquisition costs, down to $61 from $82 a year earlier. However, the signficant loss of subscribers is very troubling.

Sirius XM is quick to blame the automobile industry’s woes for its problems in attracting customers. While yes, the auto industry slowdown is exacerbating the problem, it is not the cause. It’s the company itself.

For all intents and purposes this company is being horribly managed, especially in the programming department. We’ve already covered the hot mess that is the DSquared show, but there’s more. It’s as if the service has hired complete novices to program its channels.

I’ve watched the fan boards for awhile, and over and over again its the same story. Music on a channel that is either completely off format or just plain bad, or DJs who make the stations sound like FM.

That is the central problem for Sirius XM, not the automobile industry. Start running your programming department correctly, and you won’t have such a problem keeping people.

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Sirius XM Stoops to a New Low: Reinforcing Stereotypes

Posted by Ed Oswald on May 5, 2009 at 11:05 pm

It’s no secret that a lot of satellite radio users are quite unhappy with the merger of Sirius and XM. Sirius XM has taken a beating for its questionable programming decisions, as well as its sometimes apparent obliviousness to channel formats.

The latest example involves Sirus XM’s BPM channel, the service’s supposed dance station, which has been anything but lately. Fans have voiced their outrage across the Internet, from Sirius XM fan boards to the channel’s Facebook page. That anger reached a fever pitch Tuesday night with the debut of the Dsquared show.

Dsquared is Dan and Dean Caten, a fashion duo from Europe. What is their connection to dance music? Who knows. But their new show debuted Tuesday night, called Dean and Dan on Air: Style in Stereo. What followed was the most stereotypical portrayal of the gay community I have heard in a long time.

While the music they played was one thing–completely off format–the way Mr. and Mr. Caten portrayed themselves was Godawful.

When you could understand them (they mumbled for 50% of the show), their topics of discussion had nothing to do with dance music. They also reinforced the stereotype of the effeminate, fashion-loving, and pretentious gay man–to the point it was grating.

I don’t know where Sirius XM and BPM are trying to go with this, so I won’t even guess. In any case, the show not go over well at all with listeners. On BPM’s Facebook page, not a single review was positive. Here are a few examples:

I am a young gay man. And those two things that were on the DSQUARED show. So distasteful. That show needs to be pulled off ASAP!

These guys give gay people a bad name, seriously. Way to set gay rights back 100 years. Awesome job! NEWS FLASH, there are more than just gay people listening to dance music.

this show is horrible, and sxm should be ashamed of themselves for putting on such a stereotyping show…

This dsquared show is beyond terrible….GET RID OF IT!!!!!!! Dance music does not equal fashion in America…not everyone who likes dance music is gay (no offense to gay people)

I can’t say it much better than these folks. If you’ve got satellite radio, I suggest you also take a listen for yourself–here’s the schedule. Please take this mess off the air, Sirius XM. And start listening to your subscribers. After all, they’re paying your paychecks.

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iPhone Gets Major League Baseball Audio. Be Afraid, Sirius XM. Be Very Afraid.

Posted by Harry McCracken on March 4, 2009 at 8:30 pm

Babe Ruth I’ve written a fair amount about the annoying post-merger state of Sirius XM satellite radio, as well as chatted about it with folks offline, and nearly every time I’ve expressed frustration, I’ve said something to the effect of “if it weren’t for baseball, I’d consider dumping XM and just plugging my iPhone into my car stereo so I can listen to streaming radio apps.” And I’m sure there are other folks who feel the same way.

Looks like that “if it weren’t for” will soon be inoperative. My friend Jason Snell of Macworld has blogged that the upcoming 2009 edition of the MLB At-Bat app for the iPhone will support Gameday Audio, allowing baseball nuts to tune in their hometown broadcasts (that would be the Red Sox for me) on the phone. As Jason writes, MLB At-Bat costs $5 and PC-based Gameday Audio costs $15 a season. But you gotta think that there’s no scenario in which Gameday Audio on the iPhone won’t cost far less than I’m shelling out for XM.

Is anything else that’s exclusive to XM so lovable that I’d keep the service to get it? I’ve grown sort of fond of the Siriusly Sinatra station, with its shows hosted by Nancy Sinatra and Jonathan Schwartz. But I think I can tune in Schwartz on an iPhone via his WNYC gig, and I suspect I can find enough standards music on the iPhone to keep myself entertained.

Oh yeah: I also have to figure out the best way to let my car stereo–which lacks an AUX port–tap into the iPhone. I have terrible luck with wireless FM transmitters, and have been using something called an FM Direct adapter that lets me connect my XM receiver directly to my car’s antenna. It works wonderfully well, but I don’t know if there’s anything comparable that’s iPhone-compatible. (if not, there should be!)

One way or another, though, I suspect there’s a good chance I’ll be an ex-XM subscriber come opening day.

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Sirius XM Avoids Bankruptcy – Barely.

Posted by Ed Oswald on February 17, 2009 at 7:13 am

Mel got his way, and kept EchoStar at bay (that unintentionally rhymed). Liberty Media, which owns and operates DirecTV, will invest $530 million in the troubled company in the form of several loans, including $250 million right away. That up front payment will help Sirius XM to pay off the $171.6 million of debt due today.

The rest of the funds would go towards funding the day to day operations of the company. The second phase of the loan would go to pay off debts owed by XM Radio, which has its own set of financial problems.

In return for the much needed infusion of cash, Libery Media would get seats on the board and enough stock to represent a 40% stake in the company. It also means that Karmazin has a much better chance of keeping his job.

“We are pleased to have come to this agreement with Liberty Media, particularly in light of today’s challenging credit markets. Liberty’s investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve,” he said in a statement announcing the deal.

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Sirius XM: The Writing Has Been on The Wall Since August

Posted by Ed Oswald on February 11, 2009 at 11:47 am

Harry’s post earlier today regarding the possibility of a bankruptcy filing by satellite provider Sirius XM should come as a shock to no one. In fact, the news reminded me of a story I wrote back in August of last year for BetaNews that essentially warned of significant financial problems for the company.

At the time, Sirius XM CEO Mel Karmazin admitted to reporters that the company was not in the best of financial health — including to Bloomberg TV that same day. Essentially, the company had just taken on unfavorable financing terms for debt, which would put $1 billion in debt repayments due this year.

For almost any company, such a large amount of money would be quite painful to repay. For Sirius XM, it could be deadly. It’s stock price has fallen from about $1.50 at the time of that story to only 6 cents now. Add to this a sagging economy, and apparently slow growth, and the company does not have much money to work with.

The company up until recently had seemed to argue that it was fine and would survive its debt issues. But reality has set in for Sirius XM. It is not in good financial shape at all, and never has been. The chickens have come home to roost, as they say.

Sirius XM’s problems are probably most damaging to Mel Karmazin. Up until Sirius he had great successes in turning businesses profitable. This time, there are just too many problems with the way the satellite radio business has been structured for it to be turned around.

Raising your rates is not going to solve the problem either: if anything, its going to drive folks away. Also with the quality of service dropping — from audio artifacts and cut-outs in the broadcast to questionable programming decisions and service reductions — Sirius XM may have very little time to turn itself around.

What is next? The loss of signature content like Howard Stern or sporting events? More rate hikes? More cuts in programming so that the service sounds even more like FM than it already does lately?

I ask then, what is the point of satellite radio? Might as well go to streaming media via 3G, as Harry has repeatedly suggested.

Could it come down to Sirius being bought out by someone like EchoStar? It may have to: it owes about $575 million in debt repayments to the company, $175 million due next week, and another $400 million due in December.

The Wall Street Journal is reporting that — but it looks like Mr. Karmazin is resisting. Sir, I hate to say it, but you may have no choice, you’ve had your chance. Declaring bankruptcy would open the company up to possible shareholder lawsuits, while a deal with EchoStar may keep the company afloat.

In the meantime, I think for shareholders sake, Sirius XM needs to be honest and forthcoming with us all about its financial health. After the way it handled its channel merge, I just get the feeling that this company either does not understand how, or does not want to communicate with its customers.

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Sirius XM Girds Itself For Bankruptcy

Posted by Harry McCracken on February 11, 2009 at 1:16 am

xmsirius Sirius XM, the spawn the of the merger that was supposed to save satellite radio, isn’t doing so hot. According to the New York Times, it’s on the brink of bankruptcy and could file for Chapter 11 protection any moment now. If it does so, service shouldn’t be affected, but those pricey contracts with personalities such as Howard Stern and businesses such as Major League Baseball might be. In other words, the very content that’s supposed to make satellite radio worth the bucks could be at risk.

As I wrote when Sirius XM recently raised some of its fees, I was once a hardcore XM fan, and still find much to like in the service–but I have the sneaking feeling that I’ll eventually do my radio listening in the car via my iPhone or another smartphone. And “eventually” may not be all that far away. Especially if the bankruptcy or further aftershocks from the merger impacts any of the programming I’m paying for. (I still can’t figure out why both the pre-merger XM and Sirius carried Harry Shearer’s Le Show…but the combined enterprise doesn’t.)

Meanwhile, satellite radio’s fragile condition would seem to be more evidence that sending satellites into the skies to beam stuff back to earth is so hugely expensive a proposition that it’s hard to turn it into a business. (Earlier examples: Boeing’s short-lived Connexion airplane broadband and Iridium’s satellite phone service.) Although I guess it’s possible that Sirius XM’s woes have less to do with outer space and more to do with money that stayed right here on earth–and went into the pockets of Howard Stern, Martha Stewart, Oprah, and pals.

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SIRIUSly Expensive: Satellite Radio Rates to Go Up

Posted by Harry McCracken on January 21, 2009 at 11:15 am

XM Radio Sirius Buzz is reporting that merged satellite-radio monopolist Sirius XM is planning a price hike in March for…its best customers. The cost of getting satellite radio on additional devices beyond the first one you own go will apparently go up by $2 a month; in addition, the streaming Internet service that’s now free will cost $2.99 a month.

When the FCC approved Sirius and XM’s merger last year, it was famously based in part on promises of a three-year price freeze for service. That guarantee apparently applied only to the basic $12.95 a month charge, leaving Sirius XM able to jack up other prices associated with its service. With no direct competitor, there’s less pressure to keep prices low for fear the other guy will undercut them.

Well, maybe. Satellite radio is in dire danger of being rendered irrelevant over the next few years by cell phones that stream a bevy of music, news, and talk stations for no cost beyond standard monthly data fees. Already, my iPhone gets Pandora, Last.FM, Slacker, AOL Radio, NPR, and a whole lot more. The company’s betting that locking up exclusive rights to stuff like Howard Stern and major-league sports will keep its services attractive, but that sounds like an expensive proposition for everybody involved.

News about price changes comes a few months after Sirius XM sprung channel changes on its customers without warning, driving some of its most faithful customers bonkers. (Take a look at the comments on the story Ed Oswald wrote at the time.) I’m still getting used to the combined company’s substitution of something called SIRIUSly Sinatra for the old High Standards station I enjoyed, and really, it’s the prospect of the Red Sox in the spring more than anything else that’s keeping me from defecting to the Internet. And the company’s apparent intention to continue with two separate brands with similar-but-not-identical channel lineups is incredibly kludgy; it leaves DJs having to give two channel numbers each time their identify the station they’re on.

I was hooked on XM for years, and would love to see satellite remain a viable, appealing broadcasting option. But Sirius XM is in a tight spot, and while raising rates may help whip its shaky balance sheet into shape, you’ve gotta think that it’ll prompt some longtime customers–especially those who own iPhones–to dump it.

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