SiriusBuzz

I write about satellite radio. I have Sirius, and have had XM. It sort of comes with the territory when you cover this sector, so when the availability of the BEST OF programming was announced, I found myself compelled to at give it a try.

This morning I put my investigative cap on and called customer service to not only add the new programming, but to ask a few additional questions as a “curious consumer” so that I could write about my experience.

Tyler - How is the response to BEST OF? Are you getting a lot of calls?

Customer Rep - Actually yes, we are getting a great response so far. I’m surprised by the number of calls adding the service. Did you want to add it month to month or pay for a full year?

Tyler - Well, how much will the service be if I do a full year?

Customer Rep - Your annual plan just lapsed a couple of weeks ago, so you are on a monthly plan right now. It would come to $186.89 if you renewed for one year with the BEST OF. This gives you 1 month free.

Tyler - I see, if I pay month to month it would come out to $203.88 for a year. Do a lot of people take advantage of the annual plan?

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Sirius XM Radio has officially launched their first A-La-Carte receiver, the Starmate 5. The popular model will allow consumers to choose pricing plans that suit their needs, and satisfies part of the conditions of the merger with XM.

The Starmate 5 will support A La Carte channel selection, as well as “The Best of XM” programming package. With an MSRP of $129.99, the Starmate 5 is available at retailers such as TSS-Radio, a site sponsor of SiriusBuzz.

“We are pleased to launch the first-ever satellite radio enabled for A La Carte channel selection,” said Bob Law, Group Vice President and General Manager, Aftermarket Division, SIRIUS XM Radio. “The Starmate 5 Dock & Play radio reinforces SIRIUS XM Radio’s promise to give consumers more programming and pricing options.”

Starmate 5 features universal docking capability, allowing for effortless transfer between home and car docks. The popular SIRIUS Dock & Play radio features a blue widescreen display for easy viewing and use, and includes a complete vehicle kit. Optional accessory docking kits and audio systems allow convenient use in the home, office and additional vehicles.

The Starmate 5 features:

• A La Carte channel selection or “The Best of XM” and other programming packages
• Blue wide-screen display for easy viewing and use
• SIRIUS Replay(TM): Pause, rewind and replay up to 44 minutes of live satellite radio
• FM transmitter or stereo audio output to connect to any vehicle’s radio
• FM preset function: Store the best FM frequencies in the area
• 30 presets: Enjoy fast access to favorite channels
• S-Seek(TM) Alert: Don’t miss favorite artists, songs and sports
• One-Touch Jump(TM): Jump to favorite channels or local traffic and weather
• Universal docking capability: Add accessories to enjoy in the home, office or additional vehicles
• SIRIUS XM Radio’s “Best of Both” programming and full slate of new plans, including the opportunity to choose channels on an A La Carte basis for the first time ever in subscription media are now available.

Position: Long SIRI

SiriusBuzz Radio will air in our normal Thursday night time slot again this week, and compete head to head with the Vice Presidential Debate. We recognize that listeners have requested an earlier show to accommodate the debate, but want to keep the schedule as consistent as possible.

SiriusBuzz Radio is recorded, so listeners can download any show at any time, and we encourage you to do that if you can not catch the live broadcast.

This week we can talk about Sirius XM’s new products and features making their way to market, the upcoming launch of products on October 6th, poor September auto sales, and how the proposed $700 billion bail-out will impact the markets. We also have a few other tid-bits to discuss.

Join the SiriusBuzz crew live as we dissect, analyze, and offer opinion on everything about satellite radio. Callers are welcomed to join in by calling 347-945-7995. SiriusBuzz Radio….Bringing You The Spirit of Satellite Radio.

Listen To SiriusBuzz Radio

Position - Long SIRI

Only days after an attempted financial rescue went down in flames, the Senate has passed a new bill that has some “added characteristics” designed to, in theory, help protect Main Street. The bailout plan is a polarizing issue, but there is little in the bill that really protects similar problems from happening again.

Whether you are a fan of the bailout or not, you would be best served knowing the status of it if you are invested in the markets. The issue impacts everyone, and virtually no business is insulated from it. Credit is hard to come by, and that slows down the system. People are scared, and when someone is scared a “fight or flight” instinct kicks in. In this case, fighting is nearly impossible, so everyone is taking their money and going home.

Some readers will likely express frustration that this article is not related to satellite radio. The fact of the matter is that it is indeed an integral part of why this and so many other equities have taken a beating. Sirius XM Radio has debt to refinance. Even though they should do it with relative ease, the fact that they are looking for a loan makes people nervous. If the company announces a resolution to the February converts, then all will be well….at least until the fall.

About a week ago I found myself looking for a new car. I drive a lot, and my old car was at the 200,000 mile point. It was in need of a bit of work (again), and I found myself at the crossroads of putting more money into an existing car, or to trade it in and be done with it. Ultimately I decided to get new wheels. After deciding what car I wanted, and what options I wanted, I cut my best deal, and it was off to the financing department to see if they could beat the rate I had already secured. They couldn’t, so I went with my own lender, but while there I inquired about the credit crisis. The answer I got was that many people were having trouble getting their loans, and even people with “good credit” found it a challenge to get financed. That bore out when the auto sales numbers were released today. Thus, the issue is already being felt on Main Street, and the whole economy seems to be hinging on what will happen in the house.

Will the Senate passage bring the markets up tomorrow? Perhaps, but it is Friday’s action that will be the determining factor. Stay tuned.

Position - Long SIRI

It is hard to believe, but then again it isn’t. It appears that once again car sales are down. In most years, the entry of Fall means that there are car deals everywhere as dealerships try to sell off the remaining of this years models to make room for next years. This year, the situation differed greatly. Auto makers have cut production, closed plants, and have inventory that simply does not warrant a huge sale. The customers that do come to shop are having an increasingly difficult time getting their financing, and thus many are simply opting to hold onto their existing wheels.

For satellite radio watchers, the slumping car sales is simply another negative piece of news on the stock. Yes, the penetration rate of installations is increasing, but month after month sales continue to decline. Because the OEM channel is the subscriber driver for SDARS their is a direct correlation between auto sales and the number of subscribers announced in any given quarter. Poor auto sales means fewer subscribers trying out the product.

On the positive side, self pay churn for satellite radio has been stable throughout these tougher economic times. People are feeling financial strain, but they seem to be maintaining satellite radio subscriptions at a pace that equates to past experiences.

While not all manufacturers have given numbers as yet, a few have:

• Nissan - Down 37%
• Ford - Down 35%
• Toyota - Down 32%
• Honda - Down 24%
• GM - Down 16%

With disappointing numbers well into the double digits, it is little surprise that the overall perception of the economy is not good. In the near term, the auto sector may not see a decent recovery until 2009, and even then, it is a question of how long that recovery will take. Satellite radios will continue to be installed, and subscribers will continue to sign up, but the rate is slowing, and the situation with new car sales does not help matters.

Sirius Buzz will publish our monthly sales report as soon as all data is available.

Position: Long SIRI, No Position OEM’s

Now for the first time, you can add XM channels to your SIRIUS subscription. Add “The Best of XM” on SIRIUS and get Oprah & Friends, Opie & Anthony, NHL and NBA games, the 24/7 NHL Home Ice Channel, The PGA TOUR Network, college sports, and XM Public Radio. The Best Radio on Radio™ just got better.

Oprah & Friends Channel 195 - Oprah Winfrey, Gayle King, Dr. Oz and more help you live your best life on Oprah & Friends.

NBA Channels/College Sports Channels 211-220 - Hear regular season NBA Games, the Playoffs and the Finals. / Games from the top college conferences, including Pac-10, SEC, Big 10, Big 12, Big East and ACC.

NHL Home Ice Channel 208 - NHL Home Ice, the world’s first hockey channel, delivers a high energy mix of information and entertainment. The on-ice leader for fans across North America with up-to-the-second news and analysis.

The PGA Tour Network Channel 209 - All PGA TOUR events, the British Open and more, including golf news, tournament scores, and player highlights.

XM Public Radio Channel 196 - Insightful, entertaining, and provocative Public Radio programming, including award-winning and exclusive shows from Bob Edwards.

The Virius! Channel 197 - Beware…this is radio like you’ve never heard it before. Irreverent, uncensored, so good you won’t want to stop listening. Opie and Anthony in the morning and Ron and Fez in the afternoon.  It’s addictive, it’s viral….it’s The VIRUS.

XM Site being updated at press time!

http://www.sirius.com/bestofxm

Are you freakin’ kidding me? The world used to hate us, now they are laughing at us! Before you assume that I’m referring to the financial bailout fiasco that crashed the markets today, you may want to sit down.

No, the joke that is the United States House Of Politicians (not representatives, because they sure don’t care much about representing me), that today threw the American economy into the the beginning of another great depression is not the subject of this post.

No. Not at all. The truly repulsive act of the day, goes to Rep. Ed Markey (D-Mass.), who TODAY of all days, thought it might be a good idea to introduce a new bill before Congress! You all may remember that slimeball Markey from the FCC fiasco relating to the Sirius XM merger.

With the country on the brink of collapse, this piece of crap decided today to introduce a bill that will MANDATE that HD Radio be included in all Satellite Radio receivers!

Markey said his bill seeks to address the long-term competitive health of local radio “while ensuring that their local, digital services are readily received by radio consumers.”

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On the heels of three reports issued on Friday, Citi’s Tony Wible has come out with his own report today, and joins Barclays in seeing upside potential in Sirius XM Radio. Wible reiterated his buy rating on the equity with a target price of $3.75.

“We believe SIRI’s recent stock performance is a reflection of auto weakness, credit issues, and diminishing consumer confidence. These overhanging issues have made it more difficult for investors to appreciate the SIRI’s long term value, which we now quantify using terminal cash flow analysis, long term sub estimates, and leverage assumptions.”

The analyst outlines three scenarios for investors to consider:

• Using a conservative 7x multiple on terminal cash flow per sub we believe SIRI would be worth $1.41 (20%penetration) in a worst case.
• The company could be worth up to $4.57 (50% penetration) in an aggressive case.
• A more realistic scenario (35% penetration by 2018) suggests that the stock is worth $3.00.

Wible does recognize near term issues that can weigh on the stock, identifying OEM sales and the re-financings as issues that give concern, but also as potential positives once auto sales turn around, and the refinancing happens. Wible has made a conservative assumption by calculating that the $300 mil due in Feb will be funded by an equity offering. He sees improvements in FCF due to merger synergies may put SIRI in a solid position to refinance the remaining $750 mil due later in 2009.

Position: Long SIRI

SiriusBuzz.com and SiriusBuzz Radio are proud to introduce a new feature that readers and listeners will be sure to like. We have now launched Tyler’s Take, and Brandon’s Bet. These are mini radio shows that offer insight on the week ahead as well as commentary on a subject that we feel should get a little coverage.

Each show will be available by Monday morning, and each show will be between 5 minutes and 15 minutes in length. This gives SiriusBuzz readers and listeners a chance to grab a Monday Morning coffee, and get a brief glimpse of the week ahead. Additionally, you have two individual opinions to listen two each week, as Tyler and Brandon do their own pieces with their own thoughts and style. Catch one or both shows by simply clicking on the “Tyler’s Take” or “Brandon’s Bet” section in the SiriusBuzz Radio section of the site (right side bar). For regular SiriusBuzz listeners, these shows are run through our standard SiriusBuzz Radio platform.

This week Brandon covered the Merrill, Goldman, and Barclays news that was issued late Friday. Tyler covered the same topic briefly, but then went into an opinion on whether shareholders should want a “Poison Pill” for Sirius XM Radio. A poison pill when implemented makes it more difficult for a company to be taken over in a hostile take-over.

Grab a coffee, listen to the shows, and leave your opinions here as a comment.

• Brandon’s Bet 9-28-08
• Tyler’s Take 9-28-08

Position - Long SIRI

Radio is really not a very complicated business. You want to offer something that no one else can, to attract as many listeners as possible. Sirius XM has certainly nailed this part down! The biggest problem that Sirius XM seems to have not figured out, is where and when people actually listen to radio.

I know from personal experience that I rarely listen to radio at home. I always listen in my car, yet the time spent in my car is minimal. Sirius XM has, up to now, primarily sought subscribers from those people who listen in their cars.

Most people, in my opinion listen to radio AT WORK. Over the past 2 weeks, one observant reader of SiriusBuzz has pointed several times that Mad Dog Radio is not available on the Internet, and that many people are not in their cars between 2 to 5 P.M. Which has brought me back to this subject that I am adamant about.

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