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The Sirius Radio Truth Squad

You've read here on many occasions about the excellent public relations work done by whatever companies are responsible for Sirius Radio's good fortunes. By this I mean the staggering amount of positive press the satrad company has received.

Now look at the other side of the fence. Linked below is a description of where trouble lies for Sirius Satellite Radio. It is in the unenviable position of being far more extended than its competitor. Here's an unarguable observation: There is far too much money being paid out, and too little coming in.

While we've seen the negative reports on Sirius dollars, so far they haven't included anything relative to what the company will pay Howard Stern or Martha Stewart. Neither will attract enough subscribers to cover costs. Do the math using a reasonable acquisition of either's current broadcast audience. Both are branded and (like marketing for all brands) look for a return of about 2-3% on the campaign. (You're not going to see 10% of Stern's broadcast audience move to Sirius, one reason being many of them drive GM vehicles and XM has those locked up.)

There's little being said in any press release I've seen about the enormous sums being paid to sports leagues by Sirius (or XM) either. Bottom line here is that Sirius will need far more subscribers in the short term before major investors start buying its stock.*

*Make note that Sirius Chairman Joe Clayton recently sold 600,000 shares of Sirius. He's expected to unload more.

Related Article:
MSN MoneyCentral
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Posted: 11:37 5/4/2005

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