Radio Ga Ga: Sirius XM Once Again King of All (New Car) Media

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What a difference a year makes. Last February, fresh from merging the country's two biggest satellite radio companies, Sirius XM was on the verge of departing for the big broadcasting network in the sky. Saddled with backbreaking debt and facing a crumbling car market (its largest source of new business), bankruptcy was a very real possibility.

Enter media macher John Malone on a white horse—Malone and his Liberty Media dropped a giant loan on the company in the form of a 40% stake. Soon the auto industry began to turn. Today Sirius XM's stock is worth 20 times more than it was a year ago (granted, it's still a paltry $1.07 a share).

The company—now helmed by former CBS president Mel Karmazin—reported net income of $14.2 million for the fourth quarter of 2009, versus a net loss over that time in 2008 of almost $246 million. And thanks to strengthening car sales, Sirius XM welcomed 257,000 new subscribers in the fourth quarter and now has nearly 19 million. It is projecting revenue growth this year of 7%, up to $2.7 billion. The signal couldn't be clearer!

All that rising dough will help the radio outlet retain its star performers who entice new listeners to sign up for the service. That roster includes such familiar voices as Howard Stern, Oprah Winfrey, Martha Stewart, and chefs Mario Batali, Anthony Bourdain, and Eric Ripert.

Tied as tightly as it is to the car market, Sirius XM's future success remains somewhat tenuous. The company will need to figure out how to better compete with Internet radio and find other sources for delivering new subscribers if it wants to continue this recent surge and keep the public tuning in rather than out.

[Via: Reuters]

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  • Robert Collins

    I'll be interested to see if this pans out. That's great that Sirius XM has a bunch of new subscribers in 4th quarter, but how are their attrition rates? Most of those new subscribers are on a 6 month free subscription and then Sirius XM will need to retain them. As a recent customer who opted to leave due to skyrocketing costs for the subscription, I would say they are not out of the woods, just yet. Finally, I'm curious when they will finally operate as one company. I dropped XM and could have been retained as a Sirius customer on a newer used vehicle if they would have offered me similar rates. Sirius and XM are still operating on separate customer databases and are losing customers left and right that they could have retained if their systems were integrated. Time to hire a strong Customer Experience leader.