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Old 12-21-2006, 11:00 AM   #16
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Originally Posted by Whiskerbiscuit
This is the response I was waiting for. The valid argument that I had with myself prior.

The percentages still don't match. Even if Siri had the same exact subscribers count as XM, the retail would still be only about 3-5% less share with OEM being closer, but still not a slam dunk for XM.

Sirius's churn in the last quarter were similar if not identical to XM. What's important here is that a years worth of sales on the OEM side came to " roost " ( free subs expired ) and the numbers were still within parity. E.G. it appears to me ( early data only ) that Siri has about 20 % LESS OEM churn than does XM. This might put Siri's OEM renewals at to 65%.

This won't be proven overnight as it takes more than one quarter ....but why would anyone ( I debate within ) think that Sirius has a 75% dominance ( spelled preference ) in retail without this preferential variance NOT reflecting itself on the OEM side when it comes to uptake ?

" It's not logical " Spock would say.

If I understand your argument correctly, more people choose Sirius at retail (when they have the choice) so, logically, more people would keep Sirius when they obtain it at OEM (i.e. less churn). That seems logical. 2007 is certainly going to be interesting for Sirius' on the churn issue alone. If they show a smaller churn than XM, consistently, the street may start to question XM.
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Old 12-21-2006, 11:02 AM   #17
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Siri's " pay raise ( growth ) will be 25% for the next few years.

I understand where you are going but I feel you're being overly optimistic. Your 25% growth has me scratching my head. I realize we are both oversimplifying things, this is a complicated business. But if Sirius keeps spending $200(an estimate) to bring in $120, your 'growth' , even if it is correct, is meaningless.

Again this is all speculation and guesses, but if todays trends continue for another 6-12 months I can't see both companies being around in 2008.
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Old 12-21-2006, 02:22 PM   #18
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Quote:
Originally Posted by NFL-Fan
If I understand your argument correctly, more people choose Sirius at retail (when they have the choice) so, logically, more people would keep Sirius when they obtain it at OEM (i.e. less churn). That seems logical. 2007 is certainly going to be interesting for Sirius' on the churn issue alone. If they show a smaller churn than XM, consistently, the street may start to question XM.
Exactly, and even greater than the churn advantage, what does one suspect will happen when OEM contracts expire and are re-written ?

At best ( and it's where I think the industry would go, ( sans merger which I am 80% sure will happen and for another debate )) are the OEM's REQUIRING a dual service radio. If that happens, and Sirius is assumed preferred due to content that has them winning 75% of retail, shouldn't Siri then take 75% of OEM also ? One would think.

Those will argue that Honda and GM have vested interest. I argue that their interest is in selling cars and features that America wants.

They'll roll for .05.
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Old 12-21-2006, 02:27 PM   #19
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Quote:
Originally Posted by Satradioman
I understand where you are going but I feel you're being overly optimistic. Your 25% growth has me scratching my head. I realize we are both oversimplifying things, this is a complicated business. But if Sirius keeps spending $200(an estimate) to bring in $120, your 'growth' , even if it is correct, is meaningless.

Again this is all speculation and guesses, but if todays trends continue for another 6-12 months I can't see both companies being around in 2008.
------------------------------------------------------

Here's something that supports your concern about SATRAD going bye-bye ... and it's WI-FI but what at least this one respected expert fails to consider about WI-FI knocking out SATRAD is that WI-FI would still have commercials, and still lack content.

Yet .... still another challenge to SATRAD assuredly.

-----------------------------


Should XM and Sirius Merge?
By Mac Greer
December 21, 2006
It's been a rough year for shareholders in satellite radio. Shares of both XM (Nasdaq: XMSR) and Sirius (Nasdaq: SIRI) have lost almost half their value for the year, and both companies continue to lose money.

XM has more subscribers. Sirius has the bigger market cap. XM has Major League Baseball, Oprah, and Dylan. Sirius has the NFL, Martha, and Howard. And with the divide-and-conquer approach producing mixed results, merger speculation is heating up. Sirius CEO Mel Karmazin fueled the speculation with his recent comments extolling the virtues of consolidation.

I recently talked about the future of satellite radio with business guru Seth Godin, technology commentator Bob Cringely, and Fast Company co-founder Bill Taylor.

Seth Godin: A merger's a must
Seth Godin is the author of seven best-sellers, including All Marketers Are Liars and Small Is the New Big.

Mac Greer: Seth, both XM and Sirius continue to lose money. What do you make of the marketing efforts of satellite radio these days?

Seth Godin: Well, I don't own any stock, and I don't think every day about stocks, but it is inconceivable to me that those two guys aren't going to merge. If there was ever a synergy in a merger, there it is, because then they don't have to keep fighting with each other for content and for subscribers. They both invested heavily at training a generation of people to expect that radio needs to be the way that they are delivering it.

I think the challenge they have -- and if I am an investor for the long term, what I would really want to know is -- how long before I have Wi-Fi radio in my car for free? Because once there is Wi-Fi radio, I don't get 100 channels, I get a million channels, and it is free. As cities start to blanket themselves with Wi-Fi, and the cost of a Web browser on a chip gets down to a dollar, I think that is pretty inevitable, and the question is, is it two years away or 10 years away? Because if it is two years away, then that is the end of satellite radio.

Bob Cringely: Consolidation is coming
Bob Cringely was employee No. 12 at Apple. He's currently the host of the PBS online television show Nerd TV.

Mac Greer: Bob -- buy, sell, or hold the likelihood of a merger between XM and Sirius in 2007?

Bob Cringley: Buy, buy, buy. Maybe not in 2007, but I think a consolidation is inevitable.

Mac Greer: And is satellite radio -- or is XM and Sirius, or some kind of merged combination -- is that a foregone conclusion, or is there a possibility that both of these companies could go under?

Bob Cringely: No, I don't think there is a possibility that both could go under. They have proved that there is a market there, and it is a growing market, but double the cost structure, double the overhead, and perhaps if there was only one of them, they could realize prices a little bit. But they have to compete against the Internet, and Internet radio is going to keep satellite radio cheaper. And so I am not bothered by a single large satellite provider.

Bill Taylor: Merging makes sense
Bill Taylor is the co-founder and founding editor of Fast Company, and he is the author of the recently published book Mavericks at Work: Why the Most Original Minds in Business Win.

Mac Greer: XM and Sirius have both seen their stocks struggle, but there is a lot of excitement about the satellite-radio consumer experience. With that in mind, Bill, buy, sell or hold the future of satellite radio?

Bill Taylor: I buy the future of satellite radio; I hold the future of those two companies. I think we have seen time and again [that] there is a big difference between a service that everybody wants to have and needs to have --- and I think satellite radio is that --- and being the early companies, in knowing what your financial fate would be. So satellite radio, total buy; XM and Sirius as stocks, hold at best.

Mac Greer: And do you think that ultimately they are going to need to merge?

Bill Taylor: That would seem to make a lot of sense to me.

Foolish bottom line
Well, there you have it, folks. Three of the great business minds, all of whom think a merger between these two behemoths is in the works. If you're interested in disruptive technologies like satellite radio, consider a free 30-day trial to the Motley Fool Rule Breakers newsletter. Although XM is a former recommendation that recently got sold, the newsletter's pick list still contains plenty of innovative companies that are alive and thriving. Try out the service for free today.
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Old 12-21-2006, 05:01 PM   #20
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Link for WB's article...
http://www.fool.com/investing/high-g...gvisit=y&npu=y
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Old 12-21-2006, 07:37 PM   #21
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Very good read, you guys may eventually change my mind.
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Old 12-22-2006, 04:29 AM   #22
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Very good article, thx.

Quote:
and it's WI-FI but what at least this one respected expert fails to consider about WI-FI knocking out SATRAD is that WI-FI would still have commercials, and still lack content.
I've read a few articles about WIFI in cars, but dismissed it for now because it seems like it's still a few years down the road. BUT why do you say it will have commercials? There's thousands of internet radio stations without ads. And except for Stern there's nothing on sat radio you can't get over the net. If the technology works WIFI in cars could be huge in a few years.
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Old 12-22-2006, 07:21 AM   #23
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i think its going to take more then a few years to build up the infrastructure for seemless WiFi---i do see it as the future but this will take much time as cities deal with budgets etc.
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Old 12-22-2006, 04:17 PM   #24
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I had the opportunity to talk with a Sirius Rep at my local BB today. An impressive young man that was inside the store, working perspectives and buying the BB guys pizza for lunch. I guess this answers the questions posted elsewhere why most sales employees are promoting Sirius.

The XM display was non-existent. The brochures for XM were gone. The S team was looking professional, had a very vibrant display, and sold three units while I was there.

The Rep shared with me that on a Monday internal conference call that Sirius is at or above 65% retail for the quarter as is reported by NPD their source also. In his region, he's got up to 75% market share. Outstanding.

My take away is that even more important than the share now being taken is the management structure that executed, and the product that completes the sales cycle. You must promote AND have a product to offer, by comparison, XM has neither.

XM SHOULD focus exclusively on OEM as Mr. Parsons suggested in a recent CC. Otherwise, given free choice, the customer will not choose his XM product. The data proves it 3:1.

Merry Christmas Gary and Hugh.
Thanks Joe and Mel !
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Old 12-23-2006, 05:42 AM   #25
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I guess it's according to where one lives. In the past few years I've seen XM reps at my local CC and BB 4-5 times. I've never seen a Sirius rep, anywhere. Yesterday I went back to my local CC, again the sat radio display was still stuck over in the CD section. In the auto section where there use to be a large XM and Sirius display now there's a HUGE auto GPS display.

The sat radio display had plenty of units, all types. PnP's, portables, boomboxes. I know it's only one store, but when I went there in the past sat radio units were on and prominently displayed, not any more.
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