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Old 01-18-2007, 08:50 AM   #16
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Just read an interesting take on this at the MSN board SIRIUS ALTERNATIVE...
I won't pretend to totally understand this but the poster was saying that this whole "merge" talk is actually a well thought out plan by Mel to force XM to adopt a platform of interoperable(sp?) recievers to be installed in OEM's. There is a copy of the original fcc document to support this. It says that siri/xm are supposed to offer this option to consumers and for whatever reason(prohibitive cost?) have not done so. I guess this would involve the companies "merging" on some level while at the same time maintaining two seperate lic.
Maybe someone could chime in as I don't fully understand the "endgame" with this theory..
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Old 01-18-2007, 09:16 AM   #17
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Quote:
Originally Posted by siriusurfer
Just read an interesting take on this at the MSN board SIRIUS ALTERNATIVE...
I won't pretend to totally understand this but the poster was saying that this whole "merge" talk is actually a well thought out plan by Mel to force XM to adopt a platform of interoperable(sp?) recievers to be installed in OEM's. There is a copy of the original fcc document to support this. It says that siri/xm are supposed to offer this option to consumers and for whatever reason(prohibitive cost?) have not done so. I guess this would involve the companies "merging" on some level while at the same time maintaining two seperate lic.
Maybe someone could chime in as I don't fully understand the "endgame" with this theory..
The FCC requires that Sirius and XM to make a receiver that is capable of having both systems on that as part of their SDARS license. However, there is no requirement for them to actually sell it as far as I know unless any of the satellite radio makers wants to. Of course Sirius and XM themseleves won't want to sell it (would you want to sell a product that allows direct access to a competitor?), but any of their third party makers could. Last I heard on this was that the receiver is complete (or near complete), but so far no takers on actually bringing it to retail.
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Old 01-18-2007, 12:22 PM   #18
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Quote:
Originally Posted by unoriginal
The FCC requires that Sirius and XM to make a receiver that is capable of having both systems on that as part of their SDARS license. However, there is no requirement for them to actually sell it as far as I know unless any of the satellite radio makers wants to. Of course Sirius and XM themseleves won't want to sell it (would you want to sell a product that allows direct access to a competitor?), but any of their third party makers could. Last I heard on this was that the receiver is complete (or near complete), but so far no takers on actually bringing it to retail.
======================================

Since the technology is not licensed, I don't believe that anyone other than SIRI and XM can sell it.

Sirius would like this very much like this, XM much less. Sirius had 66% of retail in December. They would obviously benefit most if a dual unit would be available, especially in OEM..
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Old 01-18-2007, 01:19 PM   #19
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From SSG.... my favorite for news...
As long as you avoid the commentary, Dobie is doing a decent job of digging up news stories. The commentary is utterly confused and without consequence.
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Old 01-18-2007, 01:52 PM   #20
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Supposedly, The technology is coming along, but it doesn't look like they are going to meet their projected timeline...

Quote:
Satellite radio enthusiasts who subscribe to both XM and Sirius may soon be able to consolidate both of their satellite subscriptions into one radio receiver. A company called Interoperable Technologies, a joint venture between Sirius and XM, is currently working to create interoperable satellite radio receiver technology that allows subscribers to access both services. Last year the company successfully completed the design of a radio capable of receiving both services, and now they have a timeline to bring a receiver to market this year, says Orbitcast.com.

A message on the Interoperable Technologies Web site reads, "Having all XM and Sirius programming available together in a single radio can be quite the compelling experience. Or, for those consumers unsure of which of two great services to commit to, offering a choice between Sirius or XM - independent of purchased hardware - may lower entry barriers and further accelerate the adoption of this exciting new media. To these ends, Interoperable Technologies continues to develop dual-mode receiver technology able to receive either or both satellite radio services."
http://www.fmqb.com/Article.asp?id=232727

Another :
http://www.orbitcast.com/archives/in...a-reality.html
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Old 01-27-2007, 10:49 PM   #21
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Quote:
Originally Posted by Crashed
But I think XM's financials are going to be impressive to the Street, and plan to buy more calls right before earnings.
On the contrary, I think XM may be a short candidate before the earnings report, regardless of how the financials look.

Right now, there's still substantial revenue (and earnings) growth priced into XMSR. However, I expect that the churn that XM reports will be hellacious, moreso than many expect. I'm racking my brain and can't come up with a convincing reason to credit XMSR with fewer than 1.1 million gross adds. That's 650,000 churnouts. That's more than the number of promo gross adds from GM and Honda. At a CPGA of $110 (which is, IIRC, XMSR's guidance on that metric, and given that they too spent big on marketing and the lower-than-expected GA's, it could well be in the $115-120 range), that's $70 million down the drain in one quarter (viewing each subscription as an asset similar to an oil well, which is not a horrible analogy). I'm anticipating an all-in churn rate of 2.9-3.2%, with 3% probably being the most likely and 3.1% being more likely than 2.9%.

With that kind of churn, there are two consequences for XMSR (keeping in mind that subscription, activation, and ad revenues are all at least somewhat levered to subscriber levels):

* net sub growth will be very difficult
* a rate increase is out of the question (if a substantial portion of your customers (real and/or potential) don't think it's worth the current rate, you're very likely at a point in the price-utility curve where a rate increase will result in less overall revenue!)

IOW, XMSR's 2007 revenue will only be 15-20% more than their 2006 revenue. XMSR will cease to be priced like a growth stock as the prospects for growth diminish. At the earnings levels that are then implied, XMSR is at best, what, a $4-$5 stock?

I don't actually believe that much (if any) of this criticism applies to SIRI. While churn will likely increase at SIRI (I'm projecting about 2.1% all-in churn, versus Q3's 2%; it's reasonable to suspect that self-paying churn will continue to drop, probably to about 1.5% or so), it is unlikely to increase as fast as for XMSR's will/has nor to increase to XMSR's levels (insert discussion of longer term subs here). This means that SIRI can grow their subscriber base, all other things being equal (which, admittedly, they're not... still, the CPGA difference may not be sufficiently in XMSR's favor to outweigh their churn issue), more efficiently than XMSR can theirs. It also indicates a higher satisfaction level, and a higher satisfaction level translates into a better scarcity position and thus pricing power. Both of these should translate into faster earnings growth at SIRI and thus a greater premium.
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Old 01-28-2007, 11:39 AM   #22
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I don't actually believe that much (if any) of this criticism applies to SIRI. While churn will likely increase at SIRI (I'm projecting about 2.1% all-in churn, versus Q3's 2%; it's reasonable to suspect that self-paying churn will continue to drop, probably to about 1.5% or so), it is unlikely to increase as fast as for XMSR's will/has nor to increase to XMSR's levels (insert discussion of longer term subs here).
XM's fully loaded churn would obviously be higher. While XM allows OEM subscribers to churn after 3 months, Sirius OEM subscribers are not permitted to churn for anywhere from 15-18 months. In effect, SIRI is counting OEM subscribesr 5-6 times as long as XM is. So, yes, you would expect higher churn from XM (also, XM doesn't have a lifetime program, which effectively prevents churn from those subscribers who take it at SIRI -- even though they may be no longer listening, or even dead).

Now, SIRI has told us they're "conversion rate" is "about the same" as XM's, they have flatly refused to announce what it is -- for no apparent reason.

I believe a logical conclusion would be that they are not announcing it because it is actually WORSE than XM's.

Churn is a huge problem for both companies now. As SIRI's subscriber base grows, so, too, will its churn figure.
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Old 01-28-2007, 04:21 PM   #23
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Quote:
Originally Posted by leviramsey View Post
On the contrary, I think XM may be a short candidate before the earnings report, regardless of how the financials look.

Right now, there's still substantial revenue (and earnings) growth priced into XMSR. However, I expect that the churn that XM reports will be hellacious, moreso than many expect. I'm racking my brain and can't come up with a convincing reason to credit XMSR with fewer than 1.1 million gross adds. That's 650,000 churnouts. That's more than the number of promo gross adds from GM and Honda. At a CPGA of $110 (which is, IIRC, XMSR's guidance on that metric, and given that they too spent big on marketing and the lower-than-expected GA's, it could well be in the $115-120 range), that's $70 million down the drain in one quarter (viewing each subscription as an asset similar to an oil well, which is not a horrible analogy). I'm anticipating an all-in churn rate of 2.9-3.2%, with 3% probably being the most likely and 3.1% being more likely than 2.9%.

With that kind of churn, there are two consequences for XMSR (keeping in mind that subscription, activation, and ad revenues are all at least somewhat levered to subscriber levels):

* net sub growth will be very difficult
* a rate increase is out of the question (if a substantial portion of your customers (real and/or potential) don't think it's worth the current rate, you're very likely at a point in the price-utility curve where a rate increase will result in less overall revenue!)

IOW, XMSR's 2007 revenue will only be 15-20% more than their 2006 revenue. XMSR will cease to be priced like a growth stock as the prospects for growth diminish. At the earnings levels that are then implied, XMSR is at best, what, a $4-$5 stock?

I don't actually believe that much (if any) of this criticism applies to SIRI. While churn will likely increase at SIRI (I'm projecting about 2.1% all-in churn, versus Q3's 2%; it's reasonable to suspect that self-paying churn will continue to drop, probably to about 1.5% or so), it is unlikely to increase as fast as for XMSR's will/has nor to increase to XMSR's levels (insert discussion of longer term subs here). This means that SIRI can grow their subscriber base, all other things being equal (which, admittedly, they're not... still, the CPGA difference may not be sufficiently in XMSR's favor to outweigh their churn issue), more efficiently than XMSR can theirs. It also indicates a higher satisfaction level, and a higher satisfaction level translates into a better scarcity position and thus pricing power. Both of these should translate into faster earnings growth at SIRI and thus a greater premium.
-------



Levi. Haven't " seen you " in a long time, and always respect your opinion...even when we differ, which we do not here.

I too have had the same thoughts re: XMSR churn and think it's over 2.8% undoubtedly. I am crediting NASCAR for at least .7 of that.

The sad thing is, SIRI will be tarred with the same brush. Both stocks are more or less tied to each other. A merger is NOT priced in. Neither is the possibility of a dual radio and/or the havoc that NASCAR is going to have with Q1 and Q2 of XMSR's reporting. E.G. I think this is Parson's spin about Q3-Q4 picking up.... he's covering for churn the first half.

Nascar has been under rated.

If there was ever a time that Siri was undervalued, this is it. It's at the bottom with upside overlooked.

Last edited by Whiskerbiscuit; 01-28-2007 at 04:24 PM..
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Old 01-29-2007, 08:19 PM   #24
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I should have sold at $9. Everyone I knew that had the stock sold at $9. I'd be $20Gs ahead. I held and bought more on the dips.

That said, I'm still at a 53% gain. Not too bad I suppose but do I get out now that it's dropping because the merger failed?

I really believed in the company and thought it would be worth so much more
in 5 years.

I just don't know and I'm disappointed Mel even tried to merge.

Last edited by Trap; 01-29-2007 at 08:23 PM..
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Old 01-30-2007, 10:24 AM   #25
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Default If you are up at 53% sell

Take the profit and leave. I am down 53%.
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