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Wednesday, August 09, 2006

Satellite Radio Losses Grow

Another good one from Podcasting News.

Losses are growing at the two leaders in satellite radio, XM and Sirius.

Sirius lost $237.8 million for the period compared with a loss of $177.6 million during second quarter of 2005. XM Satellite Radio on July 27 reported a second-quarter loss of $231.7 million, up from losses of $148.8 million a year ago.

One of the biggest issues for both companies is subscriber acquisition cost, or the money each company spends to get a single subscriber to sign up for the service. Sirius's acquisition costs dropped to $131 in second quarter from $160 in the year-ago period. XM's, meanwhile, rose to $64 in second quarter, compared with $50 in the year-ago period.

A threat that may prove to be even greater, though, is the explosion of free audio content on the Internet. Some radio experts are sceptical about the chances of new radio technologies competing with Internet audio. There are already more podcasters than radio stations in the world, and podcasts offer on-demand playback and device independence.

Even with the losses, investors appear to be encouraged by a growth in the overall market. Sirius's net subscriber additions outpaced XM's during the quarter, 600,460 to 398,012. XM has a total of 6.9 million subscribers to Sirius's 4.6 million. By comparison, podcasters currently reach an estimated audience of 10 million podcast listeners.

Sirius' CEO, was bullish on advertising as a second revenue stream. "We have approximately $22 million on the books this morning," he told analysts. "That compares to finishing all of last year at slightly over $6 million."

via Ad Age

Okay... can someone tell me which YOU would want to use to reach more addicts? I wonder how many people have been converted from satellite to podcasts. I just did an interview where they were very happy about their shows being played on satellite, and unfortunately they can't podcast them because of this. How is this freedom of the airwaves?? Argh, it's so frustrating! But each case is individual, and there might possibly be more listeners to THAT particular station than their podcast.
But if the losses continue...

But I still see it changing- satellite stinks!
(But really, I don't have an opinion one way or another...)

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