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Sirius XM Stays Alive, But Internet Media Continues Attack

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One of my frequent readers sent me an article earlier in the week that talked about the Sirius XM/Liberty Media deal that saved the fledgling satellite radio company from bankruptcy. As a shareholder in the company, believe me when I say that I was watching the newswire with baited breath on Monday night/Tuesday morning waiting for news of an announcement heralding Sirius XM being saved from the financial woes – and after a long while, that news finally came.

As the article linked above puts it:

The money-losing home of Howard Stern, Opie & Anthony and the NFL got a $530 million investment from John Malone’s Liberty Media Corp. that will keep Sirius XM out of bankruptcy. Shares of the New York-based company are soaring.

Malone is demanding a steep price in exchange for bailing out Sirius XM. Liberty will provide a senior secured loan of $280 million which matures in 2012 at an interest rate of 15 percent. Sirius XM, though, may have had little choice but to accept such a high interest rate because it had $171.6 million of its maturing 2 1/2 percent notes due Feb 17. Even with today’s huge run up, Sirius shares are down more than 94 percent over the past year.

In the second phase of the investment, Liberty will provide a $150 million loan and to buy $100 million in loans issued to XM Satellite Radio. The company will then issue Liberty 12.5 million shares of preferred stock which is convertible into 40 percent of the common equity. Malone and Liberty CEO Greg Maffei will join the board of the satellite radio company.

I take issue with the article’s use of “money-losing” as an adjective to describe Sirius XM. If you look at the figures, Sirius was on the brink of making money before it acquired XM and their unbelievable debt load. At this point, though, that doesn’t mean much since there is only one company – Sirius XM.

Since the deal was finalized, many online media sources have commented on it with varying levels of support (or contention). The New York Times’ DealBook blog, for example, looked at the Form 8-K filed for the transaction and proceeded to tear into the particulars of the deal (which are admittedly not the greatest). After the Times posted their review of the 8-K, stock prices for the company began to sink. In terms of real dollars (cents?), the stock price was at 18 cents before the Times posted their review. The stock price is now at 12 cents.

For months I’ve been harping about how Sirius XM is a great niche product for those who have extra long commutes and those who want special content like Howard Stern. The company is also poised for success in the long-term as it has some 20 million subscribers paying generally $13 per month for their service. That’s approximately $260 million per month; over $3 billion per year. Of course there are costs that have to be deducted from that $3 billion figure each year, but over time that built-in revenue base is a gold mine.

I have to wonder, though, if Sirius XM will be able to succeed in the long run with the way the internet media continues to lambaste and destroy it. The Motley Fool has it out for the company and it would appear that the would revel in its failure. And with the way the New York Times’ DealBook blog is listened to by investors, you have to wonder how many more negative reports the company can withstand in the current market.

Lobbying for Smartphones in the Classroom

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You have to admire the lengths that certain industries will go through in order to make a buck during a recession – even if those lengths are laughable at best. Monday’s New York Times had a great article that talked about how the cell phone industry is funding research that proves smartphones help student perform better in the classroom.

Imagine that! The cellphone industry is publishing a report that suggests the education industry – one of the largest in the United States – should invest in smartphones for its students. Brilliant.

This reminds me of a situation that came up at my job last year. We were engaging in a contract with a lobbyist to advocate for more dollars to be spent on education facilities. One of the ideas that our boss at the time had was to generate an in-house report showing the need for more facility dollars and how our organization was well positioned to use those dollars most efficiently.

I almost jumped out of my skin.

Can you imagine being a legislator and having ABC Company come up to you and say, “We need more money for Project X. Here is a report showing the need for more money for Project X. Please note that ABC Company is the best organization to utilize extra dollars allocated to Project X.”

Talk about self-serving! Any legislator that is worth their skin would laugh off that report and – if they are really interested in whatever “Project X” happens to be – would commission an independent report. Luckily, through some arguments and some luck, my company partnered with a highly regarded university to create an independent report on the idea of more money for school facilities. It was a much better option than having us do a report in house that essentially says, “Give us money.”

Anyway, you can read the full text of the New York Times article, but trust me – it’s slightly ridiculous.

Small Business Ownership Aggravations

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At this point, I’m sure that most of those people who frequent my blog know that I own a small website design and maintenance firm called Usable Web Solutions, LLC. The company just turned three years old last month and after owning my own small business since January 2006, I’ve realized that there are a few aggravations that come along with the job. Here are a few of them, for your reading pleasure.

  1. Pay Your Bill On Time. The biggest aggravation that any small business owner runs into is usually related to finances. To be frank, there are a bunch of customers who just don’t pay their bills. Then, as a small business owner, you’re wedged between a rock and a hard place. Do you charge a late fee and risk aggravating the client or do you stick to the terms of your contract? I say for habitual offenders, you have to charge the late fee. But folks, if you’re working with a small business – pay your damn invoices on time.
  2. Not Showing Up To Meetings. In truth, this particular point is what drove me to write this post today (and I’m writing this on Friday, the day before it’ll be on the blog). I was supposed to have a meeting with a new client at 1:00pm today – he didn’t show. This has happened on a few occasions with other potential clients. If people want to know why some small business owners stay away from random inquiries, this is the reason. No one has time in their day to go to a meeting place, sit around for half an hour, and then leave. It’s insulting and probably crosses you off of that small business’ list of future clients.
  3. I’m Not Your Tech Guy. My company designs and maintains websites. Nothing gets me aggravated more than when my clients call me and expect me to be able to fix the viruses on their computer. Look – you’re the idiot who either ran over to a porn site or actually clicked a link in the spam e-mail. Besides, my contract is to provide you with website services – not to be your tech guy!
  4. You’re Not My Website Company. On a related note, I often get bothered by people who want to plug their limited online expertise into the services that my company performs. I’ll train my clients to work with their websites, but I don’t need you telling me how to do my job. At the same time, I absolutely hate it when small clients (nonprofits or small companies like my own) want websites that are as expansive as organizations 100 times their size. Part of my company’s purpose is to provide an online business for small companies and nonprofits – if you have plans on world domination, that’s fine. Using my company as a stepping stone in your plans.
  5. Your Projects Are Different. Related to the previous point is this one, which comes up more than you would think. I often have clients who do one site with me, love my prices and my services, and then want to come back for another site or two. That’s fine – that’s actually great and it means that I’m doing my job. But when I create a small website for your small company and charge you a small fee, don’t think that when you come back with your website that is going to “rival YouTube” that I’m going to do it for beans. Frankly, I’m not going to do it because this company is my side gig and I’m really only in it to help the small guys out and earn a small profit on the side. I’m not interested in fighting the man or creating a better online profile site than Facebook or MySpace – and if I was, then you’d better damn well be ready to pony up the tens of thousands of dollars it would take to get started on that type of project!

Those are only a few of the aggravations of owning a small business. I post these here mainly for your amusement, but you never know – someone might Google this page one day and get something out of it!

Ban Idiots, Not Cell Phone Users

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At some point in the first few weeks of January I bookmarked an article on FOXNews.com that bothered me for a few reasons. The article, “Ban Cell Phones While Driving, Safety Council Says,” talks about how the congressionally chartered National Safety Council wants to ban cell phone usage from all drivers while they are driving. I’m sorry, but this is just ridiculous.

I was (and still am) annoyed that we can no longer just put the phone to our ear while driving in New Jersey, but I started using a headset. By the way, the reason why I’m still annoyed by this stupid, overreaching law is because almost every police officer I drive by on the road has a phone jammed into his ear, but the “do as I say, not as I do” thing is topic for a different entry.

Like many other drivers in New Jersey, I started using a headset and driving with the headset on isn’t that bad! However, the Safety Council suggests the following:

Froetscher said the council examined more than 50 scientific studies before reaching its decision. One was a study by the Harvard Center for Risk Analysis that estimates 6 percent of vehicle crashes, causing about 2,600 deaths and 12,000 serious injuries a year, are attributable to cell phone use. Hands-free cell phones are just as risky as hand held phones, she added.

I’m sorry, but there have got to be additional reasons for these accidents. An it’s time that Americans stop refraining from telling the truth – sometimes you get really, really stupid people behind the wheel of a car and their own stupidity is part of the reason why they get into accidents. If you’re drinking a cup of coffee, flipping through the newspaper, and talking on a cell phone all at the same time, then guess what? You should be focusing on driving! If you’re a young driver who is skittish on the road as it is, then guess what? You shouldn’t be on a cell phone! If you have problems focusing on one or two issues at a time, then guess what? You shouldn’t be on a cell phone!

In the mean time, those people who have mastered multitasking and understand that even if you can manage to do five things at once, YOU SHOULDN’T may eventually be stuck with the inability to use their cell phones while driving. It’s ridiculous that we legislate to the least among us as opposed to asking for some personal responsibility from all among us.

Motley Fool’s Unhealthy Obsession With Sirius XM

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Over and over again I’ve said on this blog that I am both a consumer of and a shareholder in Sirius XM satellite radio. I’m also an affiliate for the company as you can tell from my links all over these posts trying to get you to buy something! But I think I cover the satellite radio company honestly and from the perspective of a consumer, shareholder, and marketer of the company.

Yet, whenever I check what the online financial media is saying about Sirius XM, I always find that the loudest negative voices are spewing from the Motley Fool website. I have no problem with an analyst saying that a stock is not worth buying (at this point, unless you’re a long-term investor I wouldn’t suggest buying Sirius XM either), but the group at Motley Fool is viciously against this radio company and I can’t figure out why? Maybe a bunch of their writers got burned on the stock – who knows?

The latest article was posted up on MSNBC’s website and it talked about how Sirius XM is the worst stock of 2009. Bear in mind that 2009 isn’t even a month old yet! What bothers me, though, is the complete one-sided opinions that they put out there and the implied stance that their ideas are obviously applicable to the rest of the country. An example:

Satellite-radio competes for my ears with my Apple iPod and its dedicated car jack, my custom-burned CDs, and with a host of new mobile applications, including Ford and Microsoft’s Sync. And with other automakers experimenting with putting routers in their cars that could stream free Internet radio, Sirius’ competition for luxury dollars is increasing.

And satellite radio is very much a luxury. A past subscriber myself, I found my use waning in the months following a cross-country trip. As use fell, I found defending the monthly cost difficult — and that was before the economy cratered, when luxury spending was easier to justify.

First, just because your ears have multiple listening options, that doesn’t apply to everyone. I’m glad that you can afford a car with a dedicated jack for your iPod. I – and a great deal of Americans who are struggling in the current economy – cannot afford this luxury. Second, I’m glad that your new, expensive car has either a router or Ford/Microsoft’s Sync program. The 2000 Civic that my Mom just gave me doesn’t have those options. Neither did the 1999 Chevy Blazer that I donate to charity at the beginning of the month. Maybe the next used car that I buy will have a fancy feature or two, but again – the vast majority of Americans can’t afford these cars with all of these bells and whistles that you apparently can afford.

Need proof? Isn’t the domestic car industry in the crapper? Exactly.

It’s a shame that this writer’s cross-country trip is used as one of the driving factors in his purchase of Sirius XM. That was his dumb choice. For me – someone who drives more than two hours per day – I enjoy the variety that I get from Sirius XM. Sure, sometimes the lack of original content on Howard Stern pisses me off and yes, even with dozens and dozens of commercial-free music channels there is sometimes nothing to listen to, but that’s no different than cable television with hundreds of channels with nothing to watch!

For me, Sirius XM is the perfect companion during my daily commute and drives around the state. It’s also nice to turn it on in the office and be able to listen to commercial-free music. For some people, Sirius XM isn’t right.

However, as a shareholder I have a serious problem with Motley Fool publishing around 10 negative articles on Sirius XM this month alone. That’s ridiculous and an obvious show of bias. I wouldn’t care what Motley Fool does with their webspace, except that Google Finance uses their updates in their news feed so every few days I get another death story from these bias folks. If the rest of Sirius XM‘s investors are getting the same reports, then what does anyone expect besides a huge sell off?

If this company dies, it will be in no small part thanks to the one-sided, arrogant comments by online groups like Motley Fool.