Sirius closing gap with rival XM
Sirius growth spurt
Jan 6, 2006
With 2005's tally in, XM Satellite Radio still dominates the category though it appears that the hype surrounding Howard Stern has helped Sirius Satellite Radio close the gap.
Stern's prattling about the virtues of Sirius also earned him quite the bonus. According to a regulatory filing Thursday, the shock jock and his agent, Don Buchwald, will collect about $222 million in Sirius stock ahead of the originally set 2010 time frame because Stern helped the company reach certain subscriber targets.
The company did not disclose what those targets were, and said only that it will issue more than 34 million shares to Stern and Buchwald on Monday, when Stern's Sirius debut is scheduled.
When Stern struck his deal in October, the Sirius shares were valued closer to $110 million.
As for the final subscriber count at year's end, it was XM at 5.9 million and Sirius at 3.3 million, which shakes out to XM having added 2.7 million subs last year, 24% more than the 2.2 million that Sirius added.
But Sirius' major accomplishment that analysts are attributing to Stern is that the firm for the first time added more subs during a quarter than XM. In the fourth quarter, which was fueled by gift-giving, Sirius added about 1.1 million new subs to XM's 903,000.
"It seems quite likely that the advent of Howard Stern tilted a number of those making retail purchase decisions in favor of Sirius," said Barrington Research analyst James Goss, who rates both stocks "outperform."
On the flip side, "XM did not get decimated" because of Stern, enthused Banc of America Securities analyst Jonathan Jacoby, reiterating his "buy" recommendation and $36 price target.
Jacoby said that XM's fourth-quarter additions were lighter than they should have been because of weak sales of automobiles from General Motors Corp.
Sirius said it should end 2006 with 6 million-plus subs, while XM is estimating its year-end count at 9 million, meaning they each will add about 3 million this year.
Sirius and XM are showing off their latest hardware at this week's Consumer Electronics Show in Las Vegas and have been issuing announcements at a heated pace, with Sirius boasting Thursday that it has snatched from XM the rights to a channel based on content from Playboy Enterprises Inc.
XM had offered, for a $2.99 per month premium to its usual subscription fee, a Playboy channel until late last year. Playboy said Thursday that Sirius will launch a new channel, free to its subscribers, early this year and that it will consist of 14 hours of live programming per day, about four times more than was featured on XM. Playboy founder Hugh Hefner is expected to contribute.
"We don't have a set plan for Hef, but he will be on the channel," a Playboy spokeswoman said.
Stern's prattling about the virtues of Sirius also earned him quite the bonus. According to a regulatory filing Thursday, the shock jock and his agent, Don Buchwald, will collect about $222 million in Sirius stock ahead of the originally set 2010 time frame because Stern helped the company reach certain subscriber targets.
The company did not disclose what those targets were, and said only that it will issue more than 34 million shares to Stern and Buchwald on Monday, when Stern's Sirius debut is scheduled.
When Stern struck his deal in October, the Sirius shares were valued closer to $110 million.
As for the final subscriber count at year's end, it was XM at 5.9 million and Sirius at 3.3 million, which shakes out to XM having added 2.7 million subs last year, 24% more than the 2.2 million that Sirius added.
But Sirius' major accomplishment that analysts are attributing to Stern is that the firm for the first time added more subs during a quarter than XM. In the fourth quarter, which was fueled by gift-giving, Sirius added about 1.1 million new subs to XM's 903,000.
"It seems quite likely that the advent of Howard Stern tilted a number of those making retail purchase decisions in favor of Sirius," said Barrington Research analyst James Goss, who rates both stocks "outperform."
On the flip side, "XM did not get decimated" because of Stern, enthused Banc of America Securities analyst Jonathan Jacoby, reiterating his "buy" recommendation and $36 price target.
Jacoby said that XM's fourth-quarter additions were lighter than they should have been because of weak sales of automobiles from General Motors Corp.
Sirius said it should end 2006 with 6 million-plus subs, while XM is estimating its year-end count at 9 million, meaning they each will add about 3 million this year.
Sirius and XM are showing off their latest hardware at this week's Consumer Electronics Show in Las Vegas and have been issuing announcements at a heated pace, with Sirius boasting Thursday that it has snatched from XM the rights to a channel based on content from Playboy Enterprises Inc.
XM had offered, for a $2.99 per month premium to its usual subscription fee, a Playboy channel until late last year. Playboy said Thursday that Sirius will launch a new channel, free to its subscribers, early this year and that it will consist of 14 hours of live programming per day, about four times more than was featured on XM. Playboy founder Hugh Hefner is expected to contribute.
"We don't have a set plan for Hef, but he will be on the channel," a Playboy spokeswoman said.
Share on LinkedIn
