So, for XM, gross cost per customer acquisition is $64 x 926,281 = $59,281,984, which is slightly higher year-over-year, is it not?

Any word on how Sirius' numbers look, from the conference call? I didn't see anything in your post from earlier, Ryan...

XM needs to tighten its margins if it's going to go into the black by the end of the year (no pun intended :) )

So, for XM, gross cost per customer acquisition is $64 x 926,281 = $59,281,984, which is slightly higher year-over-year, is it not?

Any word on how Sirius' numbers look, from the conference call? I didn't see anything in your post from earlier, Ryan...

XM needs to tighten its margins if it's going to go into the black by the end of the year (no pun intended :) )

Ryan,

I don't see how the math adds up here, but maybe I'm being dense.

"Churn" refers to gross defections, correct? So churn rate is number of cancellations divided by total number of subscribers.

If XM and Sirius have equal churn rates, then they should be losing customers proportionally to how many they already have. Or XM, with (to choose a round number) 6 mil, should be losing 25% more people than Sirius with 4.5 mil.

Yet what we saw last quarter was that XM's gross minus net was over 200% of Sirius'.

I'm not taking something into account but I can't figure out what it is.

XM counts promo subs as net adds. These subs, however, are not reflected in the 1.8% churn rate.

XM's Churn Rate (including promo subs) would be much higher, as only half of those convert into self-paying subs.

Regards,

-Lord Westfall

Churn = rate x median number of subs for the month.

Sirius was at 1.8%
XM was at 1.8% of non trial subs and I believe 2.7% of all subs.

XM was just trying to pull a Mel K. XM has much better SAC (subscriber aquisition costs) $64 opposed to Sirius at approx $121.

ryan your a good man your fair and honest.about half way into the story ,i almost did a spit take then i read on.i enjoy your site.

Sirius counts cars unsold in lots as net adds. Sirius has thousands of "free one year subs" for OEM purchases counting them as subs. This free year is not up yet, but they are counted as added subs. Wait for the churn then. Most XM promo subs are three months or less.

the guy from B of A said that also .he said it was 6% XM does the same thing.

I think xm customers are gross, a bunch of xmelots.

when the sirius sub predicament was found out xm released a statement to their shareholders that they do not follow this practice . sorry sternfan73 sirius is on there own on this one .

>>>XM's Churn Rate (including promo subs) would be much higher, as only half of those convert into self-paying subs.

Sirius includes promo subs in their churn calculation. A million or more promo subs are immune from churn, which makes Sirius' churn appear lower relative to XM.

If we could compare apples to apples, I think we would see the churn rate for self paying subs would be the same, more or less.

The real question is whether Sirius' longer promo periods improve the take rate. I would venture to say that it is going to be less than XM's take rate. If it were higher, I am sure they would tout their own take rate rather than quoting XM's. The longer one has the service, the more one becomes attached to it, which would tend to increase the take rate. Other the other hand, a lot of things could happen in six months to year. Cars can be wrecked, stolen, sold, traded in, etc. People can simple become complacent about it. In the first few months, people are still aquiring new things for their cars. As it approaches a year, they are thinking about their next car.

History Guy, how many times do I have to say this? Sirius does not count free OEM trials as net subs. If they would, we'd have 12 million "net subs" and beat XM by a mile. Wait... doesn't XM count unsold cars as net subs?

This argument makes no sense whatsoever. You have to consider where the companies are coming from. The question you should be asking is not the sum of some mathmatical voo-doo to show that XM "really" garnered more subscribers than Sirius- the question is- which company is growing faster?

Its far easier for a company with twice (and that wasn't that long ago Ryan) the subs to garner more subs and grow quicker than the company with 1/2 the subs. Instead of looking at it in that manner, you argue that the equal churn rate means more losses to the company with more subscribers. To which I answer- DUH!

If XM's best argument is that their churn rate means more total churn losses, because they have more subs total, which explains their loss in the net subscriber rate, then XM is hurting. Look at the rate of growth. Your voo-doo math can't explain that away...

'History Guy, how many times do I have to say this? Sirius does not count free OEM trials as net subs. If they would, we'd have 12 million "net subs" and beat XM by a mile. Wait... doesn't XM count unsold cars as net subs? '

You're completely wrong on every point you attempted to make.

Sirius' aggressive accounting will soon wreck havoc on its shareholders

Sirius counts their promotional period because they are paid for it!!! XM is not paid for this service, they are not paid until the sub re-ups. This is why they have such an aggressive campaign to keep customers after the trial period is over, offering customers month to month at $7.00.

Now if you were paid for a service you provided wouldn't you count that as a subscriber? If Ford paid Sirius for the year promotional service wouldn't you count that? It doesn't matter if it is free to the customer or not, someone is paying for it! Not counting that would be like not counting gifts that are paid a year in advance. It is dumb not to count.

This is why there is a difference between what XM counts and what Sirius counts.

Currently Sirius has over 1.25 million subscribers in "Trial periods" or OEM periods. They are Unchurnable. Sirius counts them as a subscriber as soon as the OEM pays Sirius for the trial. Not when the car is sold. This car can sit on a dealers lot for months before being sold. Then the one year period is activated then followed by a one month grace period. At XMm they activate the radios at the end of the production line but they do not count them as a subscriber untill the car is sold. This is followed by a 3 month trial then a one month grace period.

Both methods have positives and negatives and both effect the total net and gross numbers to such an extent that you can not compare the two numbers without taking guesses resulting in no way to compare XM to Sirius.

I do like XM's method better as they get a good handle on the take rate within 4 months rather than seeing a diluted change 15 months later.

XM does coutn promotional period subs but are not paid for those. Sirius is paid for them, so who is doing the wrong here?

>> You're completely wrong on every point you attempted to make.

Oh, yeah? How would you know I was wrong? You don't work for Sirius. And like the guy two posts up from me said, XM is going downhill, and by the look of these posts, you're afraid Sirius will get more powerful.

Er, 5...

XM does coutn promotional period subs but are not paid for those. Sirius is paid for them, so who is doing the wrong here?

If I'm not mistaken, doesn't Sirius pay for the hardware, then Ford pays them back for the service? So there really isn't any money changing hands. Call it a paying subscriber if you want, but it isn't affecting the bottom line. Correct me if I'm wrong.

Good point Chipper.

It should also be noted that XM is making will be accounting for its subscribers in a more conservitive manner with respect to our new OEM partners.

-Lord Westfall

"Oh, yeah? How would you know I was wrong? You don't work for Sirius."

Sirius does not count free OEM trials as net subs.

*WRONG* they count non-self paying subs (Free to the customer) as net subs.

If they would, we'd have 12 million "net subs" and beat XM by a mile.

*Wrong* That's absurd. Are you claiming Sirius has 7 million free trail subs out there. You're a Siriot.

"Wait... doesn't XM count unsold cars as net subs?"

*Wrong* No, we do not. You are mistaken. You are a fool.

-Lord Westfall

>> they count non-self paying subs (Free to the customer) as net subs.

I ask again... how would you know I was wrong? You just said the same thing over again. You can't say touche unless you have a point.

>> That's absurd. Are you claiming Sirius has 7 million free trail subs out there. You're a Siriot.

True I might've been estimating but on the other hand wouldn't you think if Sirius added the free OEM numbers wouldn't people get suspicious about the numbers? You can't make excuses against a growing business.

>> No, we do not. You are mistaken. You are a fool.

Oh, you're right that time. You don't have that many free trial factory OEMs in your cars. You, sir, are the biggest loser I've ever talked to.

realwx, if you believe the information on orbitcast (I don't see why you'd be here otherwise) then you will accept this as evidence that you are wrong about the trial subscriber counting.

So wait. Sirius counts a subscription when it's delivered to the dealership (essentially "sold" to the dealer)

http://www.orbitcast.com/archives/xm-vs-sirius-subscriber-numbers.html

Go back and read comments there instead of wasting time in a pissing match about it here.