U.S. Auto Sales, lead by General Motors, took a nosedive last month resulting in the lowest levels in 17 years.
Total sales were down in 32 percent for the industry. GM fell an astounding 45 percent, Chrysler plummeted 35 percent, Ford reported a 30 percent drop, Nissan down 33 percent, Honda slide 25 percent, and Toyota dropped 23 percent.
As a result, Merrill Lynch analyst Jessica Reif Cohen lowered her satellite radio subscriber projections by 47,000 net additions, to 409,000 net adds.
During the Q2 conference call with investors, Sirius XM Radio Inc. CEO Mel Karmazin presented a worst-case scenario in autosales, where he felt the company would still prosper.
"...let's take the hypothetical auto production scenario of only 12 million cars sold in North America," said Karmazin. "Assuming satellite radio is installed in approximately 50% of those... That is 6 million cars equipped with satellite radio that will leave the factory.
"And then assume a conversion rate that's approximately 50%... that gets you 3 million new subscribers to satellite radio in a horrible auto production scenario," Karmazin told analysts in August.
"Compare our model to any company in the audio entertainment industry and you see the benefits of our business model as compared to those that rely principally on advertising."
[Bloomberg, Seeking Alpha]
oh please, whats on the hd radio stations! between the stations and for how long? when your in your auto about fifteen miles then kiss the signal goodbye.
Hey Mel, you make it all sound so simple; 6 million cars with satellite radio, 50% conversion rate, 3 million new subscribers! Have you any idea how depressed, beaten down, abandoned, and generally pissed off millions of subscribers are? If you don't think that people will cancel, and are cancelling due to the shabby treatment and disregard that you and managment have shown towards them, then you are DELUSIONAL !!!!!
We are not going to idly sit by while this beloved service is systematically dismantled and turned into a pay for AM/FM clone. You greedy, conniving, heartless pack of liars can rot in hell for all I care! After all the bullshit that the subscribers and shareholders went through with the merger debacle, this is what we get? All of you should be ashamed. Only a bunch of COMPLETE ASSHOLES could have destroyed this company the way that you guys have !!!!!!!!!
Yeah, this isn't good news, no doubt; But neither is such a reliance on the OEM-auto market-model; I think they have relied on the OEM-Auto model b/c it is the "easy-path", and their original best selling avenue; If it wasn't for the original OEM-auto support, satellite-radio would have never gotten as far as they have, nor as quickly to this many subscribers. In fact, it used to be that OEM-auto sales helped buffer and hedge satellite-radio's less significant sales...it always has given validity to satellite-radio; But now, we are tied to an industry in near as struggling position as the airlines were when oil was north of $145-a-barrel!
The problem as I see it is the hugely "un-tapped markets" that lie dormant and sitting in a void; I ask you, how many people would buy-and-subscribe to the service if a contractor came by their house, and did the install, in homes-and-autos, at their place of choice? Sirius-XM Radio could contract-out this business to independent contractors...and they could set-up a revenue share-plan to encourage sales! Do you realize how many more people would have satellite-radio in their home-vehicle IF they had someone to install it for them?
It's childish and ridiculous to have Best-Buy and Circuit-City account of nearly all after-market, in-vehicle installs! I have always wanted to personally under-take such an effort myself, but I'm just not versed in "electronic-installation"...to such a degree, I would give the companies a bad name attempting; My capital is too low to start-it-myself...but maybe these are just excuses; Maybe I or we could start this lucrative "self-install business"; And it would also include business installations!
On other news, I do support HD-Radio...but I find it absolutely silly that it's an "us v. them" competition...where one lives and one dies, and the other is considered absolutely worthless!
The fact-of-the-matter as I see it is that it's more a situation of "free terrestrial TV that is going digital, as opposed to a Direct-TV, with a lot of pure movie channels!" There's a market for both!
Finally, I'm afraid we need new executive level management; Satellite-Radio needs to be brought-into the 21-Century where it belongs, and that means lots of "big-boy cross-branding"...availability of content across multiple platforms, possibly some "free add-supported satellite-radio", to keep those dormant units turned-on...and a number of other forward thinking avenues to keep this medium not only viable, but to give it some prosperity and a new level of growth!
I'm not seeing that with this management team...and I'm not sure it's a "matter-of-time"!
Still here...still waiting for some prosperity!
Watching current management's destruction of satellite radio, it would be nice if HD offered an alternative, but it does not work very many places and the digital signal cuts in and out even when it does work. And the programming delivered on the HD side-channels I've heard has not been all that innovative, by and large. But I wish HD radio well - we need an alternative.
Hey Ryan, maybe it's time to ban the anonymous HD Radio spewing jerkoff above. The guy never brings anything to the table except the usual bullshit NAB propaganda.
Oops. I approved his comment by mistake. I usually don't let his senseless babble go through.
I'll delete it. Thanks Mike
Update: The HD Radio maniac's comment has been deleted. :)
HD radio is an alternative to satrad the same way FM is. For most of us we won't go back to the FM model. However, other devices are coming forward which will compete with satrad in the future.
Ryan, how sad you feel the need to delete the view of posters who post on your site who post reality instead of towing the satradio is a industry which is working. The industry never made a dime, never will make a dime. Thanks to "merge" MONOPOLY subscribers are (as told by those who know the truth ,would happen prior to "merge") have loss of choice, so not only did Mel kill the industry with his scheme, he also drove thousands of subscribers away.
AM/FM, HD and internet radio is the future. Time to face facts satradio is done.
Nice photo of the guy that counts parking lot subs.
I agree that there is a chance that Satrad could go belly up and new technology will eventually alter or kill it in the future as computers did with typewriters but I didn't go into it for the Stock Market aspect as some people did. I got it for better music choices than Terrestrial radio provides and until Satrad dies or is replaced,my wife and I will pay for it as long as it is possible. I have a lifetime membership that already has met the break even point so the $8.00 a month for my wife's radio is no big drain and I could cut out a few other expenses that are non essentials to pay it if I was forced to.FM and HD are not viable options for me.
Why did no one point out that 2% monthly churn on an 18M subscriber base is a loss of 4.2M subs per year? If you only get 3M gross adds then that's a big problem.