XM Satellite Radio On The Ropes

XM has lost all momentum, thanks mostly to Sirius paying top dollar for the top talent in radio: Howard Stern. XM said they would reach 9 million subscribers by the end of 2006. Then they downgraded that dramatically. Then they downgraded it again to 7.7 million. And now they've admitted they couldn't even reach that total, despite lowering the bar repeatedly. XM ended the year with 7.63 million subscribers; Sirius had more than 6 million. Any way you slice the numbers, that is bad news. Meanwhile, Sirius added twice as many subscribers in the last quarter, despite XM's early lead and technological advantage. I'll leave it to others to sort out who is padding their numbers with free offers, people who buy cars and get six months of service on a trial basis, and so on. But clearly Sirius is in the driver's seat. If they maintain the same pace in 2007, they will PASS XM in total subscribers by the end of the year.