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Is Sirius Fattening Itself for Slaughter?
There are two points to make here, one being that "RadioMargaritaville.com" is being picked up by Sirius Satellite Radio. That makes it an example of a move to syndicate good online radio stations across one channel - such as your local station's signal. More online stations being fed over satellite and broadcast stations' airwaves will follow.
The other point of discussion is that the math doesn't work when trying to equate the cost of high-profile programs picked up by Sirius to the number of people possibly listening at a given time.
"As of March 31, 2005, SIRIUS had 1,448,695 subscribers." That's a statement lifted off of Sirius' April 28 press release. (Curiously, it's the same release that reported $70.7 million more dollars were lost in Q1 2005 [-$190,259] than in Q1 2004 [-$119,508].)
"SIRIUS delivers more than 120 channels of the best commercial-free music..." is taken from its current release about adding RadioMargaritaville.com to the lineup.
However, that statement is negated in the next sententence: "SIRIUS offers 65 channels of 100% commercial-free music..." It's like admitting we really don't have what we just said we had. Maybe that's the approach it's taking on the financial side.
Do the math, 'cause that's what this is about - 1.4 million subscribers, 120 channels. If you distrbute those listeners evenly (which we know they won't be), that gives you 12,072.4 persons per channel. The .4 is presumably that part with ears.
Given that a day has 24 hours and America has four time zones, between the hours of 6pm Eastern and 6am Pacific there's a whopping number of people in that radio dead area - outside of drivetime. (Sirius in home/at work listening isn't even a blip yet.)
Then add this to the equation: People spend quite a few of those hours sleeping. But let's not quarrel over the small stuff. Concentrate on those 12,072 people who could/would/should be listening to a Sirus channel at any time of the day.
You know they are not all tuned in at the same time. Because Sirius, or XM Satellite Radio for that matter, doesn't share audience listening numbers, I'm going to guess that the number of people on any one channel is large, or isn't close to a small market's bad-performing station. That puts the potential for total listeners in AQH at the hundreds, maybe even the tens of people for some channels!
There's a lot of sizzle in big names such as Howard Stern, Martha Stewart, the NBA, etc. etc. etc. And Sirius seems to just be piling them on. (I'm confident there's a channel being planned that will originate from the Rock & Roll Hall of Fame; one costing Sirius "big bucks," an insider tells me.)
However - and this is a BIG however - media buyers that control the real dollars aren't interested in reaching a few thousand persons at a crack. Even if you offer them large numbers of people, media buyers who control the BIG dollars don't want that large number to be reached over weeks - they want it in one shot. Sirius and XM won't be able to do that for at least another five years, if then.
I know there's promise; but at some time, someone in the investment community is going to start asking, "When are we going to see black ink?" If that time comes in the next eighteen months, Sirius will be just a fat cow with no milk.
Related Article:
TheStreet.com
Posted:
11:35 5/11/2005
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