XM - Sirius In more $$ Trouble for 2009?

Marlin Smoot · From: Kansas

Yahoo Finance has now released its list of 15 U.S. corporations that could fail in 2009.

Chrysler, Rite-Aid, Krispy Kreme and Six Flags are in this dubious group -- and so is Sirius XM. Yahoo says huge contracts for people like Howard Stern "are looking unsustainable" and that the Sirius-XM merger "hasn't generated the savings needed to make the company profitable."

According to Moody's Investors Service, there's a "high likelihood" that Sirius will fail to pay or refinance its debt in 2009. "One outcome could be a takeover, at distressed prices, by other firms active in the satellite business," says Moody's.

Marlin Smoot · From: Kansas

I didn't think it would come this quick but here it is:

In what would be a widely expected move, troubled satcaster Sirius XM may file for Chapter 11 bankruptcy protection "within days," according to a New York Times report.

Sirius had reduced its immediate debt due February 17 to $175 million after EchoStar acquired a chunk last week in what some speculate is a step toward a hostile takeover.

Sirius XM, which has a total of nearly $1 billion due in '09, saw its stock close today at 11.39 cents, but down nearly 30% in after-hours trading to eight cents.

Steve Alonzo Walker · From: Spartanburg,S.C. USA (deceased)

Since the merger the djs on Willie's Place and The Roadhouse play three songs and talk five minutes. If I want to listen to that, i'll turn off XM and turn on regular radio!

Donny Hinson · From: Glen Burnie, Md. U.S.A.

I knew they were in bad straits when they gave schlock jock Howard Stern 500 million dollars. Stern tries so hard to be a cross between Larry Flynt and Larry King, and usually fails miserably. When "schock" was new and different, so was he. And now that it's kinda old and hackneyed, well...so is he. Sad

Les Anderson · From: The Great White North

This could mean our subscription money is down the tubes with no recourse for recouping the money?

K.J. Tucker · From: Texas

Well I was just one subscriber with 7 radios hooked to that little DOG !

The programing got so bad I told them to just turn them off and send me a final bill . That was 7 months ago and I am still waiting for the bill , the telephone boiler rooms still call wanting to sell me better service ! Ha when I tell them I had them turned off they say well ya it shows father down your account!

These folks can't hit water when falling out of a boat !
Later
Tuck

Craig A Davidson · From: Wisconsin Rapids, Wisconsin USA

We have a radio in both trucks and our rates went up. Also we now have to pay 2.99 more a month to listen to it online. So we told them to stick the online service. One more rate hike for the truck and it will no longer have them either.

Brian Kurlychek · From: Maine, USA

The commercial-free radio business model can't last. They must transition to commercials in order to sustain their huge operating costs.

I knew it would only be a matter of time. Anyway, the bankruptcy will let them restructure.

It seemed like satellite was the wave of the future, but with the high cost of those satellites and no way to fix 'em, plus the fact that there are other entertainment mediums that have surfaced that don't get blocked by a leaf or clouds.... I think their days are numbered.
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Tony Prior · From: Charlotte NC

Sat. will not go away, they will restructure, they will have new investors who take ownership. They invested too much into a few people, that's always an issue. I have sirius and I have yet to listen to Stern. I didn't listen to him when he was free in our area. The bigger issue is not if, but rather when Congress starts to legislate what can be said on the radio. Once that occurs all "interseting" radio shows will be on Sat and off the so called public airwaves. I paid a 1 year sub and will certainly re-up when it is over, that is if it still has sound coming out of it Crying or Very sad

Alvin Blaine · From: Picture Rocks, Arizona, USA

I don't see it working past another year or two.
Neither XM or Sirius has ever made a profit and their overhead is more than what they take in for subscriptions. With the two combined now, they only have 85 million subscribers world wide.

It's just going to get worse for them, with all the other ways to get music and entertainment. You can get instant streaming, of music, news, and sports to your iPhone, PDA, Blackberry, you can download podcast on your MP3 player, get live concerts broadcast on our laptop and every thing in the world on your home PC. All of it more convenient, more reliable, and cheaper than Sirius/XM.
Sirius and XM were both obsolete companies before they even merged the two. Now it's just one big obsolete dinosaur.
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Barry Blackwood · Posted 11 Feb 2009 2:14 pm

Kevin Hatton · From: Buffalo, N.Y.

Get rid of Howard Stern. I would think that 500 million could go to better use. Like more classic country.

Tony Prior · From: Charlotte NC

The sirius stations from Bluegrass back up the dial thru each of the Country stations are very good, I listen to them all the time. I hope they can find there way past huge contracts with limited audience shock jocks. If they can't then they will indeed go down in flames.

tp

Ray Minich · From: Bradford, Pa. Frozen Tundra

In my ideal world we'd have an Organic Chemistry channel, or a Solid Mechanics channel, or an Integral Calculus channel Razz

Tony Prior · From: Charlotte NC

or maybe the Chess club national meeting channel

Mike Poholsky · From: Kansas, USA

I travel 40K+ a year in a vehicle. Satellite Radio has been a treasure! I enjoyed XM Radio for the last few years. X Country & Willies Place were a great combo for a steel player on the road. In the last few months as they have tried to merge XM and Sirius it has started to resolve itself to commercial radio. Same songs same type of DJs. X Country worse than Willies Place. Very disappointing. I'm still a paying customer. Month to Month. Just don't know what the future will bring. If it goes away I'm REALLY going to miss it.
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Gary Boyett · From: Colorado

I know how you feel Mike. I had the same problems. The music stations just played the same list over and over. If you are a commuter you probably don't notice.
Willie's place drove me away with the "gonna buy B.J a beer in Gopher-hole CO."

I finally just got an i Pod and have not been happier.
Between the over 6000 songs, 12 movies and over 100 pod-casts I can keep busy. You can hook these up to a TV in a hotel and watch movies. Not recommended while driving though...

Marlin Smoot · From: Kansas

As expected, Liberty Media Corp. came to Sirius XM's rescue Tuesday (Feb. 17) just in the nick of time. In a deal announced by both companies, Liberty agreed to invest an aggregate $530 million in the form of loans to Sirius XM in exchange for a 40% equity interest in the company.

Sirius XM's troubles are far from over. The company still has about $1 billion of debt due this year and $3 billion debt in total due in the coming years.

Barry Blackwood · Posted 17 Feb 2009 9:09 am

Marlin Smoot · From: Kansas

Sirius/XM: It’s Much More than a Money Issue
February 18, 2009 ·

So we have a last minute bailout for Sirius/XM with John Malone riding in as the white knight.

Mel ends up with $530m in bailout dough, and life goes on. But satellite radio has deeper problems that begin and end with the paying customer. Because if current subscribers don’t renew, and economically challenged new customers don’t come into the slot….all the bailout money in the world will not slow the eventual demise of a technology that is already outdated.

Creating a Technological Leap

Satellite radio has not created a technological leap for the consumer. Think of it this way. How many current subscribers could live without satellite radio? Hold onto this thought and ask yourself the same question about other technologies that may have created a technological leap for you.

Could you live without your cell phone? How about your IPod? Some refuse to ever give up TIVO or DVR technologies. Can you get by without your laptop? Compare these needs to the need for satellite radio.

Satellite radio is nice to have but not required to have for far too many current subscribers. The fact that many customers feel it is a want and not a need is going to create huge problems down the road for Mel Karmazin. I need to have my IPod, my computer, my cell phone and my TIVO. I certainly can live without a $12.95 per month Sirius invoice. The technological differential between satellite radio and other “can’t live without” technologies is just too great a divide.

Satellite radio is an already outdated technology. Commercial free streaming of music via mobile technologies will one day make satellite services obsolete. Will you pay for in-car satellite service when you can plug your cell phone into your car and receive digital quality uninterrupted customized music for free?

The early adopters already have their home computers wired into their home stereos. These same people will have their cell phones plugged into their cars and wired for the world wide web of music. And these early adopters are the core subscribers to Sirius/XM services. They will soon be gone.

Finally “free” is an outstanding business model. Napster created one of the largest technological leaps in history when they offered free music file sharing with a click of the button. Free radio still commands a lions share of music listening. Sirius and XM have a combined subscriber base of 20 million listeners. That reach barely exceeds the radio listenership in New York City alone. Total radio listenership in the US is around 230 million. Free music is a strong need. Paying for music is a luxury.

Yes it’s great when you live on an island, or go boating, or sit in your car or truck for hours at a time. Yes it is a great place to find out about new music, or listen to sports, or go deep with Howard. The variety of programming can be wonderful.

But wonderful enough to support $ 3.25 billion in debt? Wonderful enough to create a technological leap that equals a cell phone and places you into the “I can’t live without it” world of need??? Maybe for some of you. But definitely not enough for all of us.
The business model is broken. The consumer model is broken. The technology is old.

RIP Sirius/XM. All the money in the world won’t save you from a very weak technological leap of faith.

Brian Kurlychek · From: Maine, USA

The solution is simple. They need to sell ad space. They can do this a couple of different ways. They can run commercials, and they have the ability to scroll ads across the display unit. I believe it is only a matter of time before they adopt one if not both of these business models.

When they premiered, the big hook was commercial-free music. But the talk channels all have commercials anyway. Even the free stuff other formats offer has commercials unless you go to a "premium" package which costs more....

500 million for a pervert plus the other bad decisions they've made make me wonder if kindergardeners are running the show. The Stern thing was the result of a greed war bewtween Sirius and XM and I doubt that he would have gotten that much after they merged. Its a shame, because the FCC has been squeezing stern for decades and he really had no other alternative but to go to satellite.
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Dave Mudgett · From: Central Pennsylvania and Gallatin, Tennessee

Brian Kurlychek · From: Maine, USA

[quote ]We own the stinkin' airwaves. They're ours. Not Clear Channel's or anybody else's. We need to damn the torpedoes, force the politicians to give them back, and open them up to local operators again.

IMHO.[/quote]

In my opinion that will never happen, but my reasons why would turn this into a political discussion.

[/quote]
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Leslie Ehrlich · From: Saskatoon, Saskatchewan, Canada