Statements by Sirius XM management during a conference call in mid-March reflected confidence about the benefits to come with Liberty Media’s $530 million refinancing of the company.
After its first full quarter as a merged entity, Sirius XM reported a total net gain of 83,000 subscribers – albeit on the OEM side – and a 22 percent reduction in operating costs. Executives also said the company would redouble efforts to help aftermarket retail sales after an economic downturn that “dampened the December seasonal bounce,” as operations and sales president Jim Meyer phrased it.
With that, there was also some new-product news: namely, that the MiRGE interoperable satellite radio would soon be available, along with an iPhone/iPod Touch application that would allow streaming of Sirius XM content to subscribers over the devices, according to Meyer, He pointed out that there are seven million such smart devices currently in the market that will be able to take advantage of the app.
Aftermarket dealers polled for reaction to the announcements were pleased with the Apple app news – even though it would allow new customers to subscribe without having to buy the radio hardware.
“It will spur the business, and it’s certainly better than inexpensive FM modulators, which don’t sound good,” said Matt Hartberger, car buyer at Roanoke, Va.’s Audiotronics. Hartberger isn’t complaining too loudly about his satellite radio business, however. “Q4 was pretty good, although it was the slowest Sirius and XM Christmas due to the merger news along with the bankruptcy rumors.”
People coming in and buying Sirius XM products right now, he added, are not new customers but rather, predominantly pre-existing customers who like the technology and want to access it in other places besides a single car. Hartberger said he wished that the supply of Sirius hardware was more plentiful – the shortage likely being a byproduct, he said, of the distribution transition from Directed Electronics to Audiovox.
What Hartberger said he would like to see from Sirius XM in the way of help are more of the 20-second made-for-TV commercials that helped his store popularize XM back in the day. “News spots showing XM and Sirius together would help us a lot,” he said.
Don Barros, director of mobile electronics and senior buying manager at New Jersey-based 6th Avenue Electronics, said he was “excited” by the iPhone app announcement, “since we’re an Apple partner. We sell a lot of iPods. It’s good even if we may not sell as many tuners, because it’s good for the category, for everybody.” Barros added that Sirius XM’s tiered-pricing packages were also doing well – an assessment that dovetailed with the company’s assertion of widespread subscriber acceptance of these packages, especially for the “Best Of” $16.99 higher-priced ones.
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