Thursday, April 27, 2006
Sirius Vs XM Satellite Radio
Which satellite radio company is winning the war to become dominant? In the past, I would have said that XM's early lead was insurmountable; it's awfully hard to catch up to momentum like that. XM also got the best sports package -- Sirisu got the NFL; XM got the far more valuable MLB baseball, with more games and much more demand. Both can claim big stars working for them. But Howard Stern was a game-changer for Sirius. According to Business Week, in the fourth quarter of 2005, Sirius added more subscribers than XM and Stern is the reason (I should hope so, given the money they spent). BW attributes 1 million subs directly to Stern. Sirius is now at 4 million and XM at 6.5 million. And the bad news is piling up for XM. Its stock dropped on the news that the Feds are investigating them for their marketing practices, their fourth quarter losses were higher than expected and -- depending on who you believe -- Sirius is closing the gap in subscribers. The two companies use different ways of measuring subscribers, with the big debate over how you handle people with "test" or unpaid subscription offers (like someone at a ball game who wins a three month gift subscription). It's unclear who is padding their numbers with this and how many it constitutes. Both companies are increasing their ads (XM even changed its slogan to reflect that). And in what I think is one of the stupider moves, XM is letting Opie & Anthony take its daily show to CBS Radio and the old Howard Stern slot. They insist O&A will be able to plug XM, but surely the biggest draw of satellite radio is exclusive programming, just like HBO's big draw is original shows like "The Sopranos." How would it benefit HBO to let "Sopranos" air on the CBS network? This race is far from over, but what looked like an insurmountable lead by XM has become a real nail-biter.