Analyst: XM, Sirius Won't Hit Positive Cash Flow Until 2008
October 13, 2005 at 5:44 PM (PT)
It's not necessarily what XM SATELLITE RADIO and SIRIUS SATELLITE RADIO want to hear, but KAGAN MEDIA RESEARCH is projecting that the satellite radio providers will not reach positive cash flow until 2008 with a combined $454.1 million in EBITDA. KAGAN's Satellite Radio Outlook 2005 report projects an over $1.5 billion cash flow deficit for 2005-2007. XM's MAJOR LEAGUE BASEBALL contract and SIRIUS' HOWARD STERN deal are mentioned by KAGAN as among the elements pushing up marketing and programming expenses.
"A growing subscription base is vital to satellite radio's long term success," KAGAN Associate Analyst MICHAEL BUCKLEY says. "And although XM and SIRIUS continue to attract new customers at an impressive rate, high operating costs have impeded their ability to generate positive cash flow." The report projects 46.8 million satellite radio subscribers by 2014 and $7.6 billion in revenue, 11% of which will be advertising revenue.
The complete report, selling for $995., is available by clicking here.