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SIRIUS XM Radio Inc. (SIRI) Financial News - Sirius Second Quarter Subscriber Growth - A Closer Look

SIRIUS XM Radio Inc. (SIRI)

Sirius Second Quarter Subscriber Growth - A Closer Look

Quote: I must admit I was surprised when SiriusXM reported that it had added 452,000 subscribers, exceeded 21 million for the first time and was increasing its forecast of Subscriber Net Additions for 2011 from 1.4 million to 1.6 million.And, yes, I was wrong last month when I wrote that Sirius would not increase subscriber guidance.So, what happened and why was I surprised?There are many factors which drive subscriber growth.Gross subscriber additions come primarily from new light vehicle sales in the US.To a lesser extent there are also gross subscriber additions from the Sirius Certified Pre-Owned (or CPO) program, reactivations of canceled or lapsed subscriptions, retail sales of SiriusXM radios, Internet subscriptions and activations in by buyers of satellite radio equipped used cars.Then there are the deactivations, or subscriber cancellations.When these cancellations are from the Self-pay Subscribers, Sirius calls it Self-pay Monthly Churn, or more simply, Churn.The remainder of the deactivations are from the Paid Promotional Subscribers and Sirius provides that information indirectly with a metric referred to as the Conversion Rate - the percentage of Paid Promotional Subscribers that become Self-pay Subscriber at the end of the paid promotional period (or trail).The cancellation rate for these trials is 1 - (Conversion Rate).Sirius showed improvement in both the Gross Subscriber Additions and improvement in all the metrics that drive deactivations.For me, the biggest surprise was in a metric referred to as "penetration," the percentage of OEM vehicles equipped with SiriusXM radios.This number increased to a record of more than 65%.As Mel Karmazin stressed on the conference call, "Over 65% in the second quarter, our penetration rate has never beenhigher, and I think it highlights how satisfied auto makers are with ourservice and the broad demand shown by consumers. Just to repeat, over65% of all new vehicles manufactured...
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SIRIUS XM Radio Inc. Stock Summary

Sirius XM Radio, Inc. provides satellite radio services in the United States. It offers commercial-free music channels that provide a selection of music genres, such as rock, pop, hip-hop, country, dance, jazz, Latin, and classical; and channels of sports, news, talk, entertainment, traffic, weather, and data content. As of March 31, 2008, the company offered a programming lineup of 69 channels of commercial-free music; 54 channels of sports, news, talk, and entertainment; and 11 channels of traffic and weather, as well as informational data services. It served approximately 8,644,319 subscribers. In addition, the company sells radios and accessories for use in cars, trucks, homes, offices, ...
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