Sirius, XM buzzing to build biz by '06
Satellite radio is facing a do-or-die December.
And in attempts to keep their names in the news, the country’s satellite radio firms, XM and Sirius, are engaging in a last-minute flurry of announcements, marketing and publicity campaigns. Not all of them, however, are created equal.
Sirius issued Tuesday a multipage press release announcing the “expansion” of its NBA partnership, but there was little news apart from making official a previously forged partnership; a touted 24-hour NBA channel, for instance, had launched two weeks ago.
XM, meanwhile, has sent out five press releases in the last week. Tuesday it scored its biggest bit of news: Bob Dylan will host a weekly show that will have him interviewing guests as well as deejaying.
Both companies say that they are simply announcing the deals as they happen. “We haven’t gone, ‘It’s the fourth quarter, let’s jam out press releases,’ ” said Sirius spokesman Patrick Reilly.
But the firms also admit the holidays are a heady time for their subscription-based services. Sirius is counting on the January launch of Howard Stern to help it move units and hit its target of 3 million subscribers by the end of 2005, a number Wall Street is keenly watching. (At last count Sirius had roughly 2 million subs.)
Sirius has plastered Los Angeles with Stern billboards, and earlier this week launched its first Stern broadcast spot. Stern, who has cooperated with the press only sporadically during his over-the-air tenure, has opened up for “60 Minutes” and major newspapers. “We’re close to reaching a crescendo for the quarter,” Reilly said.
XM, which has a broad base of niches but no Stern-like uber-presence, has countered with a campaign designed to “highlight the diversity of our personalities,” according to spokesman Nathaniel Brown. Called “Listen Large,” it features TV promos from the likes of Ellen DeGeneres, Derek Jeter, David Bowie and Snoop Dogg.
Not to be outdone, Sirius has just taken to the airwaves with ads featuring program host Martha Stewart. In the December announcement blizzard, the company also disclosed a Christian talk station.
The next few weeks are also key, given that both companies continue to operate at a loss, and it’s unclear how deep, and for how long, investors will tolerate the bleeding. XM lost $134 million last quarter; Sirius finished with a decline of $180 million. XM has a sub base several million higher than Sirius.
Sirius also got some bad news Tuesday when Banc of America analyst Jonathan Jacoby downgraded the stock from “neutral” to “sell” and said the company may miss the 3 million sub figure. Jacoby had harsh words for the satellite radio company: He said that the Stern hullabaloo has caused the company’s stock price “to become completely detached from the underlying business fundamentals.” Sirius closed down 45¢, to $7.01.