Sirius-XM Revs Up 14%
December 19, 2008 at 5:13 AM (PT)
SIRIUS XM RADIO stockholders met yesterday (NET NEWS 12/18), and approved the four proposals put to them. They also received some good and bad news regarding the financial state of the company.
SIRIUS-XM saw revenues and subscribers jump compared to last year, reports MEDIAPOST, giving the formerly beleaguered satcaster some good news in a bad economy. But there is some doubt that the good times will continue, as one of the satcaster's major sources of new subscriptions -- factory installations in vehicles -- appears to be headed for a ditch in 2009.
First, the good news: SIRIUS-XM will finish 2008 with over 19 million subscribers, which is up 10% from about 17.25 million, and revenues of around $2.4 billion -- up 14% from $2.1 billion according to CEO MEL KARMAZIN, who engineered the two satcasters' controversial merger earlier this year. KARMAZIN also remains positive about the future, forecasting a total of 20.6 million subscribers and revenues of approximately $2.7 billion by the end of next year. Those are increases of 7.8% and 12.5%, respectively.
However, KARMAZIN's optimistic forecast for 2009 was based in large part on subscription sales to new vehicle owners, with an expected "uptake" rate of about 50%. This means that half of new vehicle owners opt to subscribe -- roughly the same proportion as 2008. But even relatively well-off consumers are cutting back on big-ticket items like cars.
Beneath the positive outlook, the satcaster has moved aggressively to limit costs since its merger. According to KARMAZIN, the merged company cut 22% of its total workforce, which went from about 2,050 to 1,600 in the second half of the year.