Sirius (SIRI) Gets More Subscribers, But Can It Stay In Business?
January 4, 2008 by Douglas A. McIntyreSirius (SIRI) announced that it ended the year with 8.3 million subscribers, a 38% increase. What it did not mention is that it also exited the year with about $1.3 billion in debt and $2.2 billion in total liabilities.
The Sirius merger with XM Satellite (XMSR) has also been sitting with the federal government for almost a year. The two companies believe that the merger will allow them to cut costs and handle their substantial debt loads.
But, a 38% increase in subscribers may be too slow. Sirius lost another $120 million in Q3. Music publishers and artists want more money for the content that the company broadcasts. Big talent like Howard Stern may ask for more compensation when their programs are being heard on the two merged networks.
Sirius may not see costs drop much right after a merger. It will have to operate two networks because it is not on the same system as XM. Consumer electronics devices like the Apple (AAPL) iPod are being used to provide entertainment in cars. That means satellite radio may have to increase marketing to stay in the game.
Sirius has a long way to go to become viable.
Douglas A. McIntyre
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.