Second Quarter Reports for SIRIUS are In
SIRIUS Satellite Radio’s second quarter financial reports are in and the news is mixed. The company posted losses that were even higher than they were a year ago ($237.8 million vs. $177.5 million), but raised the bar for its yearly financial outlook. SIRIUS had predicted earlier that they would end the year with just over $600 million in revenue and with a subscriber base of around 6.2 million. Those numbers are now up to $615 million and 6.3 million subscribers. Subscription levels for the current quarter are up 64% from the previous one and revenue-per-subscriber is up from $10.50 to $11.16. Monthly churn, however, is up from 1.4% to 1.8%.
What do all these numbers mean? Well, for starters, I think it is safe to say that both XM and SIRIUS are content with temporarily operating at a loss, since the business of both requires them to build up a base of subscribers that is as large as possible. This, of course, requires lots of money. Both companies have been spending like madmen on marketing and development, and both have recently signed agreements with car companies so as to make satellite receivers factory options in as many cars as possible. This spending is compounded by the fact that both are also, however, still dealing with the FCC regarding the emissions of their transmitters. In any case, it seems that both XM and SIRIUS are operating under a get-subscribers-at-all-costs mentality. Currently, XM has 7 million subscribers, while SIRIUS has 4.7 million.
Part of the reason that SIRIUS is expecting a late-year surge is the impending release of the Stiletto, a portable satellite receiver that is supposed to hit stores within the next few weeks. For rumors surrounding the specifications of the device, check with Orbitcast and Gizmodo.
See the full stories regarding SIRIUS’ financial outlook at Reuters, the Houston Chronicle, and Orbitcast.
