Published On: May 20, 2009

Sirius XM Shows Loss In Overall Subscribers (404k) For First Time

Published On: May 20, 2009

Sirius XM Shows Loss In Overall Subscribers (404k) For First Time

Sirius XM has been a big hit with listeners for a long time - it offers both better sound quality and better music/listening choices than commercial radio. Therefore, the company has been surprised by a quarter that saw its subscriber base recede by over four hundred thousand.

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Consolidated satellite radio provider Sirius XM is reeling from having lost 404,000 total paying subscribers in the first quarter of 2009. This is the first time Sirius has ever shown contraction in the number of their subscribers. It comes on the heels of the provider bringing much of XM Satellite Radio's programming to Sirius, which has subscribers miffed.

Poor programming is a strong reason that people are pulling out of their Sirius XM subscriptions, but it's not the only factor. The massive failures in the U.S. automotive industry - specifically at Chrysler, a key supporter of Sirius XM - is limiting the new cars sold, meaning there are fewer new cars with paying Sirius XM subscriptions. Additionally, the poor economy, horrible real estate market and nearly 10 percent unemployment make the roughly $12 a month for Sirius XM an expense people can live without in these trying times. The fact that Sirius XM thought that they could increase rates on their multi-user accounts (their best, highest-paying subscribers) was yet another massive miscalculation.

The miracle financial lifeline from Liberty Media during the first quarter of 2009 bailed the debt-laden Sirius XM from its most recent money woes. Ironically, many think the actual savior of Sirius XM is a rumored $12 per month Apple iPod application. While cell phones clearly compete with satellite radio, there is no clear bridge between people willing to pay the subscription fee and the normal rate for Apple "apps." Even if the Apple iPod application is a success for Sirius XM and it opens up a new audience of potential subscribers, the new venue does nothing to change the poor quality of the music programming on the many of the most popular stations.

Source: Wall Street Journal

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