Stern Leads Sirius to Large Loss
By Ed Oswald | Published May 2, 2006, 11:40 AM
Sirius Satellite Radio said on Tuesday that its quarterly loss doubled, mainly due to a $225 million stock payment to shock jock Howard Stern. For the quarter ending March 30, the satellite radio operator posted a $458.5 million loss, compared with $193.6 million a year ago.
Stock compensation charges were nearly $285 million of that loss. This compares with a $38.7 million charge a year ago. However, revenue tripled from $43.2 million a year ago to $126.7 million, and the company showed strong subscriber growth.
Adding 761,187 customers in the quarter, the company's subscriber base grew to 4.1 million customers. This was 57 percent of net adds for satellite radio and nearly a 2-to-1 advantage at retail. The strong results also led Sirius to raise year-end guidance to 6.2 million customers.
Even with the company's continued financial issues, CEO Mel Karmazin put on a positive front. "Things are really going great here at Sirius," he said.
Karmazin told analysts that costs are stabilizing, and the company could potentially break even on a cash flow basis by the end of the year. XM has made a similar promise, however neither company has shown any progress so far this year.
Subscriber acquisition costs were $113 for the quarter, flat with the previous but down from $190 in the year-ago quarter. Karmazin also pointed to the company's slowing marketing expenses, saying Sirius' programming lineup was beginning to speak for itself.
The company also said it plans to have its first wearable satellite radio available by the summer, and will stream the Howard Stern show via the Internet to Sirius subscribers by Father's Day.
I just saw a Mercury commercial touting new Mercs with no charge Sirius and 3 year free subscriptions. Nice way to fluff the numbers and increase the losses for the next quarter.
Score: 0
|Funny. XM has been doing the same thing with GM for three years now. Talk about fluff...
Score: 0
|Mercury is giving away the store, with GM you buy the radio and get a free three month trial. Clearly Sirius is trying to fluff their #'s with this promotion.
Score: 0
|I appreciate your bias, but the GM promotion is counted as a new subscription. Even as such, Sirus has been signing them up 2 to 1 since last fall. And the O&A deal will last perhaps twice the time CBS gave Roth...unless the FCC hits 'em first. Moonves and Freston have become the comedy team of the year...
Score: 0
|Right back at you with the bias... For the record, I have nothing against Sirius and have never even listened to their service. The topic here is the huge loss that Sirius posted. Giving away the product and its subscription for three years is not going create new revenue for a long time, it only increases the numbers on paper. XM and GM are giving the new listener a free taste that is likely absorbed in the cost of the unit.
As for O&A, we'll have to wait and see how long they last this time. Regardless of how long that is, it sure is a nice teaser for XM.
Score: 0
|"For the record, I have nothing against Sirius and have never even listened to their service."
"Regardless of how long that is, it sure is a nice teaser for XM."
------------------------
Oops. You're pretty convicted for someone with "no bias."
BTW the GM "teaser" was 1 year for me. When I chose to cancel in February they offered me the service for $4/mo for one year.
And really...compare the number of GM vehicles to the number of Mercs sold in a given month and you'll still have XM with the majority of "gimme" subs. Sirius has along way to go before they get close to XM's giveaway quantities.
Score: 0
|Read my comments again, you still haven't addressed my them. So far you have only criticised XM. If you can't see the difference between giving away 3 months or even a year of service verses a free radio and three years of free service then this is pointless. This promotion doesn't seem like it will help curb Sirius' losses.
Score: 0
|Oh, and they've been promising the wearable radio for a year now. Other than some hunk of crap that you have to download content to, and listen to it as an mp3 player. they've got nothing.
Neither company will make the money it will need to survive until they merge. XM has the technology and less repetition, sirius has the hot name.
Score: 0
|Wow, did Matt Drudge write this headline? What a lie once you read the report.
Score: 0
|I am curious as to a number of things.
At this juncture, it is in Sirius' favor to report a loss. But the real question is how much of this is a 'paper' loss.
After all, for all of the promotional incentives it provides during its period of market development, it can deduct them as if they are real losses in revenue.
For example, if they discount an initial subscription, there is a paper deduction of the difference between the real revenue and the 'stated potential full price revenue'. Does Sirius really 'lose' anything? Of course not, only what it might have potentially received. And for all of the other incentives it is able to do the same thing repeatedly. So, I would love to know what its real cash flow situation is, not it's reported profit/loss. I suspect they are doing substantailly better then the profit/loss statement shows.
And regarding Howard Stern. Boy, this is a big non-starter of an argument.
Whether you like his show or not (and I must admit to not finding too much entertainment in his show), I however Do find him to be a very intelligent and quite fascinating guy on the rare occassions that you get to listen to him seriously discuss issues and ideas outside the scope of his show - especially his understanding of the medium or radio/TV itself and the media. His market insight is amazing, and its a shame that you seldom have the opportunity to hear the man himself behind the act and the reasoning that occurs.
And much of the debate over Stern is not about Stern the actual person, but debating his 'on air persona'. And to confuse the 'on air persona' with the real man is akin to debating whether Boris Karloff should have been allowed to walk the streets of civilized society based on the movie monster roles he played! And TOO MANY miss this point!
Score: 0
|This is a business story, not a review of the entertainment value of Howard Stern.
If Sirius hadn't signed Howard Stern they would be about 2 million subscribers lighter. At $12.95 a month that is $155.40 per year totaling over $310 million generated by Stern the first year alone. Profits will come over time similar to cable television. Stern has single-handedly made Sirius the hip service everone wants while leaving XM for the older crowd. Howard Stern has clearly changed the competive landscape making XM the satelite radio company most likely not to survive.
The numbers tell the story ... Sirius is signing up retail subscribers at a 2-1 pace over XM. One bright spot is that XM still has the most exclusive auto relationships, but they will be expiring over the next few years. However, even with those deals XM is losing money because of heavy discounting.
XM clearly needs its own Howard Stern.
Rich Ord
http://www.webpronews.com
Score: 0
|They do!...
Opie and Anthony... And if you ask me and many others, they are way better than Stern any day..
http://www.opieandanthony.com/
Score: 0
|LOL.
This makes me happy. Howard Stern is a joke and I'm glad he's getting what he deserves.
Hahahahahaha!
Score: 0
|Howard Stern, need i say more. It's worth every dime. And i expect more listers to move to Sirius b4 long.
Score: 0
|they are payring too much for stern. i forgot the exact number, but i think they gave him $400 millions in stock options, which stern exercised them on day one.
Score: 0
|In philosophy we call this "False Cause":
"1. Sirius Radio makes x amount of money before Howard Stern was available.
2. Ever since Howard Stern came on, Sirius has made less money.
Conclusion: Howard Stern is causing Sirius to lose money."
Correct premises, wrong conclusion. Another example, just to prove the point:
"1. Studies show that children consume more ice cream in the Summer than any other season in the US.
2. More drowning deaths occurr in the US in Summer than any other season.
Conclusion: Eating ice cream increases your risk of drowning."
Same thing--true premises, wrong conclusion. Sorry, I have a final in that class tomorrow so it is stuck on my mind from all that studying last night :)
BTW--I can't even stand to see, hear, or even sense the presence of anything even remotely associated with Stern, but I must admit that there's a lot of people who like him. Just FYI...
Score: 0
|I got Sirius long before the deal with Stern was made, but I've always liked his show. He was taken out of our market years ago. Yes, to some people he's the sleaziest guy on the planet, but it's very entertaining to those with the same sense of humor.
And Howard On Demand is great. Being able to see the interviews and the stuff that actually happens is gold.
But I agree with other posters, if you don't like it, you don't have to listen to it. There's no reason to bash something just because you don't like it. Just move on.
Score: 0
|hesh proclaimed:
"But I agree with other posters, if you don't like it, you don't have to listen to it. There's no reason to bash something just because you don't like it. Just move on."
Exactly. I'm not gonna spend money on a Mel Gibson movie or a Toby Keith CD, but if someone else wants to I'm not gonna stop 'em.
Score: 0
|"Because you don't like something" is just about the only reason to bash something, so just give it up.
Score: 0
|So, um what exactly would you stop someone from doing that they want to do, and why?
Score: 0
|is this realy a surprise.
Score: 0
|Does anybody still listen to this boob? I mean he was funny the first five minutes I listened to him but it's very redundant now. I mean practically anyone talks about sex and makes fun of others.
Score: 0
|quote:"...plans to have its first wearable satellite radio available by the summer, and will stream the Howard Stern show via the Internet to Sirius subscribers by Father's Day."
Great! i'll just lip sync at bars with Stern on full-blast.
Score: 0
|"They obviously knew what they were doing, because XM is being left in the dust. . ."
---------------------------------------------
Have you checked lately to see who has the most subscribers?
Score: 0
|Have you? Sirius is WAY larger than XM. Check your figures there, bit boy.
Score: 0
|Actually, Sirius is the smaller of the two companies. XM has 6.5 million subscribers. Sirius has 4.1 million. That's a big difference.
Score: 0
|Good job XM.
Score: 0
|Well someone is lying, because they proclaim Sirius is outpacing XM, maybe they meant their growth is faster than XM.
Score: 0
|They maybe outpacing xm now, but once Sirius signs all of Howard's fans things will level off...
Score: 0
|Personally, I think satellite radio in its current state sucks. You have to choose between a service that offers Howard Stern and a service that offers high quality multi channel 5.1 surround sound. I want both.
Score: 0
|dwaterman spoke:
"...once Sirius signs all of Howard's fans things will level off..."
You say that like there will never, ever be a "new" fan. Quite an unlikely scenario.
Score: 0
|...actually I said that like Sirius is getting an influx of new subs due to Howard's arrival, once those people sign the new subscription rate should level off to a pace similar to that of xm.
Score: 0
|Howard Stern ??
Oh yeah...that name does sound vaguely familiar.
Score: 0
|Actually you've overlooked two choices, both and neither. If you have the money you can shell out for both. Right now, I'm opting for neither. I get introduced to enough new music through TV and movies, and if I want something for keeps, I can just go out and buy it. Wait a minute, radio isn't really something that gives you "for keeps". Besides, most of the music I want, I already have. I don't need someone else telling me what order to listen to music in. I am not a Fascist.
Score: 0
|Canada doesn't like Howard Stern. But this is what makes America so great, we do have a choice, albeit many people don't like the choices that OTHERS make, like Firefox, Linux, Kia, living in Longview MN, that sort of thing..
But at any rate, we DO have the right to do whatever we want. Canada, imposed a BAN on Howard Stern. I don't agree with his show, but I certainly don't agree with a Federal BAN on ANYONE. That's why we have a Right to FREE speech. We have the best censorship in the world, its called an OFF button. If you don't like, well you can turn the damn thing OFF!
Don't hate the game, hate the player. Switch, turn OFF, move.. if you don't like.
It really is that simple. Sirius CHOSE Howard Stern. Its THEIR money, they can do with it as they deem appropriate.
They obviously knew what they were doing, because XM is being left in the dust. . .
This is a LONG term investment. You have to spend money to make money. They shelled out some duckets in the interim, but this WILL pay handsomly over the course of the next 10 years for Sirius, maybe longer...
Score: 0
|What makes America great is that we have the freedom to believe what we want, and the government doesn't tell us what to believe. Except that they do.
This will get a touch off topic, but it is something that has bothered me greatly as of late. Public schools are Federal--yet they will teach political and religious views and that is unavoidable. Why? Because the Government can't monitor every teacher in the country, and because many views they are supposed to teach are actually biased at the start.
Public schools teach evolution for the most part, and may briefly mention Creationism or Intelligent Design, but the students must KNOW evolution while the tests do not ask about the alternative. Don't get me wrong, although the Founding Fathers may or may not disagree with me here, I believe that teaching STRICTLY creationism is wrong as well. Teach both sides or teach neither--don't pick one over the other.
Now, back to topic--yep, Stern's on Satellite Radio, and he has much more freedom there because it is a service you must pay for. FM radio is different and he could be sued, but he has every right to say what he wants there as long as it does not promote or induce violence or treason.
Score: 0
|*This will get a touch off topic, but it is something that has bothered me greatly as of late. Public schools are Federal--yet they will teach political and religious views and that is unavoidable. Why? Because the Government can't monitor every teacher in the country, and because many views they are supposed to teach are actually biased at the start.*
And while we are on this subject, why is it that in the South they don't want evolution to be taught?
Its an opinion, like religiion is an opinion. Let's not forget, christiananity was once a cult.. and people were not ready to believe in that either..
I say no one asked god what god did. We are ALL Assuming what happened, nobody knows for sure.
What if god simply snapped fingers, and said let there be light, and the Big Band theory was a spontaneous creation of God. Nobody want's to talk about that, this is a little off topic too, but you said it bothers you, THAT bothers me too.. its rediculous. We are arguing over who did what, what happened, and NOBODY knows for sure, but God (if you believe in a supreme being). I am not trying to sway the vote one way or the other, I am reiterating what you said about the Feds making us believe in certain things and not others, which is true.. you can't watch everyone... But then why can't you show 2 sides, and let someone make an educated decision.
Score: 0
|The same way the US government has an office thats in charge of censoring subjects, words and bodyparts from TV?
So the US lets the person talk but severly limits what he or she can say to the general public. Canada ban the person entirely instead of letting him talk thru his fingers where the whole message won't be heard anyway.
My point is, this country isn't as free as everyone makes it out to be. There are actually many countries much more lenient than this one.
America did not invent freedom.
Score: 0
|Long live the Church of the Flying Spahetti Monster! ;-)
(If you aren't familiar, enjoy a smile here:
http://www.venganza.org/
And for still more laughs, check out the debate over whether it is legitimate in Wikipedia:
http://en.wikipedia.org/...lying_Spaghetti_Monster
and other sites, as Wikipedia deletes the best discussions! ;-)
http://marc.perkel.com/archives/cat_religion.html ...scroll to portion addressing FSM issues on Wiki)
Score: 0
|Ah, but religion isn't an opinion in the same way that what flavor of, or whether or not you like ice cream is an opinion.
Score: 0
|That's what they get for taking on the sleaze-bucket. I don't understand why his garbage is even allowed to continue. I have no pity for Sirius.
Score: 0
|Clearly your comments come from someone who hasn't heard a minute of Stern's show.
Subscribers are what matter. The loss is not unexpected, although it's a bit painful. If they keep growing like they have been, especially over the past 6 months, they will post better earnings in the near future.
Score: 0
|Clearly your comments come from someone who hasn't heard a minute of Stern's show.
And why on earth would I have a gripe against someone I've never heard before? You make no sense. Of course I've heard his show. It's complete trash.
Score: 0
|First you bag on Sirius and then "claim" to be familiar with the Stern show.
Yes. I'm rolling my eyes.
Score: 0
|dude, I understand you don't like Howard Stern, but he has a *HUGE* following of people that DO listen to his rant, stupid comments, sleezy ho show. I have Sirius, but I had it before he came on board.
Like the other guy said, you obviously haven't listened to his show, and that's ok, because its your perogative. I occassionally listen, and its good for a chuckle and entertainment when I am sitting in traffic for an hour every morning..
Its a good distraction. I do understand you don't like him, but understand that he has about 15 to 25 million DEDICATED listeners. That's why Sirius brought him on and paid him so much money.
Now before the argument starts that XM didn't take him, they WANTED him badly, they couldn't afford to pay him the 500 million Sirius did.. that's the ONLY reason XM didn't get him.
Score: 0
|They aren;t asking for pity. They will get ALL this money back. Their subscriptions have almost tripled since December...
Score: 0
|Okay, I'll bite.
15 to 25 million listeners of which only 1 million has since signed up with Sirius since he started. Stern advertised on his show for over a year that he's going to satellite and only 10% of his audience follows him over?
I don't have to point out how much of a Stern fan rijp is, I think we can all come to that conclusion.
So half a billion dollars for 1 million subs? Does this make sense to anyone? A smart BUSINESS move for XM not signing him for half a billion. A shame Sirius couldn't use some of that money for R&D to produce a wearable unit BEFORE Father's day. But we all know Howard has to get his.
Score: 0
|Sorry fictionles...you have bad info.
Since Stern announced the move to Sirius in '04.
From October 2004:
"Sirius Satellite Radio (nasdaq: SIRI - news - people ) said its subscription list has exceeded 700,000 members and is on pace to reach 1 million by the end of the year."
source: http://www.forbes.com/fa...1019autofacescan06.html
Analysts hemmed and hawed over the $500 million pricetag - some estimating huge numbers that few thought possible:
"BoA analyst Jonathan Jacoby has done some recalcuations from his previous estimates, that now reporting that SIRIUS will need 2.4 million subscribers (up 900,000 from 1.5 million) to break-even with the signing of Howard Stern. Instead of $500M, he says that SIRIUS needs to make up $679M estimated to payout to Stern."
source: http://www.orbitcast.com...eakeven-with-stern.html
By early April 2006, conservative subscriber estimates:
"Stern’s move has attracted 4 million listeners thus far."
source: http://www.columbiaspect...006/04/07/4435fac7d0322
Yep. It was a good gamble. And the man who, along with Stern, built Infinity (Mel Karmazin) is running the boat.
Score: 0
|I'm forced to agree. Howard Stern was AWESOME years ago and he was on fire for a long, long time, but today he’s warn out, tired and sleazy. If he would move away from the porn and the political bashing, it would bring the show up a little bit. Although, I would still listen to him if I could, but he's no longer on the radio.
Score: 0
|I am not a fan at all. Did you even read my post?
I said I am a casual listener, I could care less one way or the other about Stern, but facts are facts, you f**tionie.
*A smart BUSINESS move for XM not signing him for half a billion*
XM offered him 450 million you moron, if they had the CASH they would HAVE taken him, but they couldn't afford it like Sirius did..
Your bite needs more efferdent, you chowser head, because its more like gumming to me.
Score: 0
|I didn't say I was familiar. I said I've listened to it. Why would I want to be familiar with horse crap?
Score: 0
|Like the other guy said, you obviously haven't listened to his show, and that's ok
*raises eyebrow*
Umm...
Like I just said: Why would I have a gripe against someone I've never heard before? That makes absolutely no sense whatsoever. You must have skipped class the day they taught reading comprehension.
Yes. I have listened to the show. Two entire broadcasts. I wish I had listened to two less than that. I listened to the first one out of curiosity. I listened to the second one about a year later wondering if he had gotten better, but he didn't; he got worse.
I don't care how many dedicated listeners the guy has. Poop is poop. I don't care who likes him or who doesn't like me for not liking him. It makes no difference to me. I'm just voicing my *opinion* of the guy. Whether or not you like it or agree with it is your concern; not mine.
Score: 0
|Wincemeat sed:
"Yes. I have listened to the show. Two entire broadcasts."
That's like someone saying they know all about the alphabet because they saw Sesame Street twice...
I'm just sayin'....
Score: 0
|I didn't say it was a lot. But it's a lot more than "a minute". And it was more than enough for me to get the general idea of what his show is about. Are you going to disagree with that statement?
P.S. Learn how to spell my name if you're going to quote me.
P.P.S Learn how to spell "said." Maybe some more Sesame Street would help?
Score: 0
|Where are you getting your numbers from? Sirius' subscription base has not tripled since December.
Score: 0
|Wincemeat sed:
"I don't understand why his garbage is even allowed to continue."
Two listens and you've decided that it's unfit for *anyone* to hear.
Yes. I'm still rolling my eyes.
PS: That's no [sic] on your name...but then, a humorless person would probably miss that.
Score: 0
|That's no [sic] on your name
Say what?
Score: 0
|He's saying misspelling. But it was used wrongly. When you quote someone and they misspell a word then you insert [sic] before the word so readers will know it's incorrectly spelled.
Score: 0
|[sic] Wincemeat pie.
Score: 0
|Where can I buy stock???
Score: 0
|I really don't think that Stern has brought the hype or the numbers he or anyone expected to Sirius. The deal that Opie and Anthony struck with xm and CBS is going to really hurt Sirius and Stern in the long run. They are on the air in seven major markets (fm) for three hours every morning and then finish off with two hours of uncensored show on xm... xm comes out of the deal with a three hour commercial every weekday, not bad.
Score: 0
|Woah, what? I listen to FOUR hours of uncensored O&A every weekday morning on XM...
Oh, and it's not that XM couldn't afford Stern, they didn't want to spend the kind of money for what he's worth. XM didn't need to bring some shock jock on just for subscribers. Opie and Anthony chose XM over Sirius (that had offers from both) because they felt XM was overall a better company. I agree. XM invested in ground-based repeaters instead of some shock jock. Good choice. Sirius reception is nowhere near as good as XM's in most places. XM was the first to come out with portable receivers. XM's equipment has always been a lot smaller than Sirius'. XM is the first to come out with near-DVD quality surround sound. XM has many more commercial-free music channels. XM was always ahead of Sirius, especially with subscriber numbers. They are still getting more new signups than Sirius.
And Sirius is JUST starting to offer streaming content via internet (of Stern)? XM's entire lineup is accessable for free to subscribers via online broadcast, and it has been for a while now. They also let you subscribe to the streams if you don't have a satellite receiver, for something like $4/month.
Edit: joining the OA room on PalTalk during their show is awesome...much much fun, yes.
Score: 0
|Listen closely tomorrow... simulcast on CBS and XM till 9an eastern and then uncensored on xm until 11am.
Score: 0
|The new format for opie and anthony is going to bring a nice chunk of listeners to XM. Sirius' gains from stern are about done. Oh, and stern didn't bring 2 million subscribers to sirius. If you think that every subscriber since his announcement was because of him, then go right ahead and keep thinking that way. They were getting subscribers at a good rate before he ever announced, and so.... if you take their rate before he announced, and the rate after he announced. figure the difference, and that's what he brought to sirius. comes to about 800k not attriubutable to the normal rate of subscriptions. Reality is that a 60 year old nearly retired ex shock jock just doesn't have much to offer anyone anymore. True, he used to have 20 mill fans. But all i hear now is that he has a gold digger girl that lives with his (old disgusting) ass, and how he invented everything in the history of radio. He'll be retired completely in the next 2 years. And in those next few years, expect the two companies to merge into one.
Way to go Marconi!
Score: 0
|"Oh, and stern didn't bring 2 million subscribers to sirius."
------------------------------
No, he didn't. It was more like 3 million.
The facts are all there for you to see above, should you care to investigate the documentation.
Given your disdain for Stern, I suspect you'll ignore these and continue with your bashing....
Score: 0
|Can you post a source that gives Howard credit for close to 3 million subs?
Score: 0
|