 RAIN 2/26: Sirius XM posts Q4 profit; Karmazin boasts higher listener monetization than Net, AM/FM ·Feb 26, 12:53 PM LOOKS FORWARD TO MORE GAINS IN 2010Sirius XM on Thursday announced their first profitable quarter since their 2008 merger. The company posted fourth-quarter net income of $14.2 million, a big turn-around from the previous year when Sirius XM had a net quarterly loss of $245.8 million. Total revenue rose 6%, beating out analysts’ expectations. The company’s stock closed at $1.07 on Thursday — a year ago it was as low as 5 cents a share.
Looking forward, Sirius XM expects to add half a million new subscribers in 2010, citing a recovering auto market. The company added 257,000 new subscribers in the fourth-quarter, raising their total count to 18.8 million. They also hope to increase revenue by 7% in 2010. The New York Times has more coverage here. KARMAZIN: WE MONETIZE LISTENERS BETTER THAN WEB RADIO, AM/FMIn the course of announcing Sirius XM’s fourth-quarter results, CEO Mel Karmazin argued that the company monetizes its listeners better than Internet radio and AM/FM broadcasters. Tom Taylor reports that Karmazin said Sirius XM generates $70 per listener and claims AM/FM only gathers $10-20. And “the largest Internet radio company” (read: Pandora) generates only $1.20 per listener per year (based on $50 million revenue with 40 million users).
“It’s apples to oranges, of course,” notes Taylor. Broadcasters don’t charge subscription fees, as Sirius XM does, but that gives them a much larger reach. Meanwhile, webcasters are relatively new to the field and are “figuring out just how big [they] can be,” Taylor writes. RAIN ANALYSIS: Let’s also not forget that webcasters have much higher royalty rates than satellite radio. Under the settlement between SoundExchange and pureplay webcasters, Internet radio pays the greater of 25% of total revenues or a Sirius XM on the other hand pays SoundExchange a flat fee of 6.5% of gross revenue for 2009. Additionally, in June the company passed the cost of these royalties onto consumers by raising subscriptions $2 a month (RAIN coverage here). This means Sirius XM collects around $36 million a month from its roughly 18 million subscribers for (it says) meeting the cost of royalty fees. Compare that to the roughly $44.5 million they’d owe in royalties for the entire fourth-quarter (based on 6.5% of their reported revenue of $684 million, via The New York Times). While not all Sirius XM subscribers pay the full extra $2 a month (“Mostly Music” packages pay an extra $1.53 a month, for example), the point remains that Sirius XM can more than cover the cost of their royalties — and monetize their listeners in general — by capitalizing on the fact that consumers have no other choice for satellite-delivered radio. Even “the largest Internet radio company” doesn’t have that liberty. — MS share: del.icio.us.  Reddit  Digg  Yahoo  Wink  Windows  Google  Newsvine 
CommentCommenting is closed for this article.  Other stories RAIN has upgraded (and moved)! RAIN 9/13: RAIN Summit Chicago takes place today! RAIN 9/12: First Summit in RAIN's hometown takes place tomorrow RAIN 9/9: Summer holidays, "doldrums" impact July Webcast Metrics, but audience up over last year RAIN 9/8: Clear Channel launches new customizable iHeartRadio beta; RAIN goes hands-on RAIN 9/7: Meet more speakers you'll hear at RAIN Summit Chicago in less than a week RAIN 9/6: Clear Channel taps The Echo Nest to take on Pandora RAIN 9/2: RAIN reviews Spotify's radio-like product Artist Radio RAIN 9/1: UK online radio aggregator Radioplayer campaigns b'dcasters to create "all radio" ratings RAIN 8/31: Execs from Merlin, Triton Digital, jacAPPS and more to appear at RAIN Summit Chicago |
per-performance fee of $0.00093 in 2009. This totaled $30 million for Pandora in 2009 (
According to Investors Business Daily, Sirius XM’s debt to equity ratio is 33404%
It is comparatively easy to monetize, as Mr. Karmazin proudly avers, when there are no other competitors and when the law, in the form of the DMCA, discriminates blatantly against internet radio relative to the medium he oversees.
I should think it would be difficult not to demonstrate some growth when the laws and the fortuitous circumstances favor a particular medium.
— Charlie · Feb 27, 02:31 PM · #
As an addendum, I would argue that when infrastructure for broadband, and, in particular, that for mobile broadband, improves, when the DMCA is amended to treat internet radio equitably and when internet radio consoles are manufactured into cars as standard options, then let us see and evaluate how much better internet radio will do relative to other media.
— Charlie · Feb 27, 02:52 PM · #