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Why I Need Sirius XM Radio

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Readers of this blog know that I’m not shy about my unabashed support of satellite radio company Sirius XM. I’m a shareholder and a long-term subscriber and I sing the praises of the company whenever I can. Hell, I even include direct links to their products in my blog entries as you can see! With all of the negative buzz surrounding the company from its constant attacks by the internet media, I thought I would relay a brief, positive story about the company.

On Monday of last week, my Sirius XM unit started showing a message saying, “Antenna Not Detected.” I hadn’t moved the unit or the antenna in many months so I wondered what the problem could possibly be. After some fiddling, the message went away and the unit worked fine. Then Tuesday came around and the message popped back up on the radio. I figured that some more fiddling would fix it – nope. I didn’t get mad, but I wondered what the issue was that was causing the problem.

I tried to self-diagnose the problem. On the one hand, I have a Sportster Replay, which is one the older, discontinued models and there was a chance that the unit was shot. On other other hand, though, I’ve only owned the radio for three years so for it to be busted after three years of use is unacceptable. I did some Googling and the information online wasn’t really clear about what the problem was (it could be the unit or it could be the satellite receiver or it could be something else – great). As it turns out, the satellite receiver was shot and I needed a new one, which was provided free of charge via a spare receiver that one of my roommates had (thank you!).

However, in the few days where I didn’t have Sirius XM I had to listen to terrestrial radio on my two-hour daily commutes plus my driving around town. It was mostly miserable. You really forget just how many commercials there are on terrestrial radio until you have prolonged exposure to the endless drones of car, lawyer, and doctor commercials. And they don’t stop. Two minutes goes by, three minutes, five minutes, seven minutes – sometimes even more! It was horrible.

To avoid the commercials on Howard Stern’s channels on Sirius XM, I flip to one of the music channels. Easy enough, right? Well, with terrestrial radio when the talk show hosts would hit their ten to fifteen minute non-live content breaks I was essentially screwed! First, I had to find a channel with music on it that I actually wanted to hear. Second, I had to hope that the channel came in clear (my commute takes me across state and I generally heard more static than anything else). What aggravation!

When one goes a few days without Sirius XM satellite radio, they begin to really appreciate how great of a service this really is for those who have long commutes. I’m so glad that Sirius XM exists because other than NJ 101.5 (when it’s not on another ridiculously long commercial break) there is absolutely nothing to listen to on terrestrial radio.

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.

Sirius XM Prepares To Raise Its Rates

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Satellite radio company Sirius XM is preparing to raise rates come this March. I have a few comments on this development – some comments as a shareholder in the company and some comments as a consumer of their product. I’d be interested to hear what your take is on this topic, too.

As a shareholder, I’m completely in favor of Sirius XM raising their rates because I know that the company has a series of “financing events” coming up this year where billions in existing debt need to be refinanced. The company is working hard to strategically position itself for the coming years so that it is a streamlined company that continues to grow and generate revenue, but this has been a tricky process.

Towards the end of last year, many of the niche music channels that Sirius XM listeners grew accustomed to hearing were removed in favor of condensing the company’s offerings. This attempt to streamline its services by removing duplicate channels has generated mixed results. Some of the condensing made sense. For example, adding the 40’s on 4, 50’s on 5, 60’s on 6, 70’s on 7, 80’s on 8, and 90’s on 9 channels was the only logical move to make with the standard music channels. The same is true of the Sirius XM Love channel which plays love music all day. Having separate Sirius and XM channels for these standardized playlists is a waste of money.

On the other hand, when Sirius’ Back Spin Radio channel was replaced by XM’s Pop2K channel, the Back Spin fans went bonkers. Through a coordinated campaign, they successfully lobbied to get the Back Spin channel brought back to the Sirius XM line-up (fans of the Strobe channel did the same thing). Creating cost synergies makes sense, but so does listening to your fans.

Now, from my standpoint as a consumer of Sirius XM radio some of the pending price increases really piss me off. First, they are removing the free internet feed and adding a $3.00 monthly fee without increasing services. The company’s argument will be that they are upgrading the internet fee to the better, clearer 128k connection. Guess what? I don’t want the better connection! I’m perfectly okay with the lesser connection that I have now because it works fine!

My way around this fee, though, will be to NOT order the internet service and instead purchase a boombox for when I want to listen to Sirius XM in the house. Plus, with the boombox I can pause and rewind the radio because I’ll be using the unit that I have in my car. So take that!

Second, Sirius XM is increasing the additional account fee by $2.00 to $8.99 per additional account. In other words, if I have my master account paying $12.95 per month (that’s $13.86 per month with tax) and I want to add an additional radio to my account, instead of paying the $6.99 rate, I’ll now have to pay the $8.99 rate. For one extra radio, that brings my total monthly payment with tax to $23.48. If I was to throw in the internet radio on top of that, then my monthly payment with tax to $26.68. That’s too much for anyone to pay for a monthly convenience like satellite radio.

Third, I’m greatly concerned that Sirius XM is now finding ways to skirt around the government’s decree that it could not raise rates for the first three years it existed as a merged company. When approving the merger, the government said that basic rates could not be increased for three years. Well, if the basic internet rate was free, then isn’t charging $3.00 per month essentially raising the rate? And isn’t raising the additional radio rate by $2.00 per month essentially raising the rate? I don’t like it and I would imagine that other consumers won’t like this either.

And yet because of my daily commute and the amount of driving that I do, I still find the company well worth the $13.86 that I pay each month. But paying anything more than that? Well, frankly I don’t know if I could justify an additional expense for not getting an additional service.

However, as a committed shareholder I hope that you clicked on one of the links in this entry and purchased a product from Sirius XM! I truly think the company has great long-term potential – I just question whether squeezing more money out of its already committed subscriber base is the right way to realize additional income.

Terrestrial Radio Keeps Killing Itself – Why?

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Watching old-fashioned terrestrial radio continue to kill itself is becoming tiresome. After Howard Stern left censored radio to become the star of satellite radio, the entire radio industry was shaken up. CBS Radio came out with a series of Free-FM channels that focused directly on talk. This turned out to be one of the dumbest moves in the history of the industry because long-time rock stations were being converted to talk stations. When it flipped from music to Free-FM, New York’s WXRK (better known as 92.3 K-Rock) went from the highest rated rock station in New York City to not even being ranked in the top 10. The dummies at CBS Radio finally realized the error of their ways and brought back the K-Rock station, but this was just one of a series of screw-ups by the company.

Some of you may remember when I blogged about CBS changing the format of 101.1 in New York City – the number one ranked oldies station. When CBS changed from the oldies format to some stupid “Jack-FM” concept (which was based on an iPod style – playing whatever they wanted to play), the station quickly tanked. Again, after realizing the error of their ways – and losing tons of advertising revenue – CBS Radio changed their minds and brought back the oldies format.

And now we have the latest blunder in the New Jersey/New York terrestrial radio meltdown. Press Communications, the owner of four stations in the Monmouth County/Ocean County area, have taken their G-Rock Radio Channel (106.3 FM) and changed it to now be called “Hit 106.” The name change isn’t the problem – it’s the format change. As described in the Asbury Park Press:

Less than a week after the Jersey Shore station WHTG (G-Rock) 106.3-FM switched from an alternative rock format to contemporary hits, a group calling itself “Bring Back G-Rock,” with a Facebook page, is planning a protest at noon Saturday outside the station’s studio at 2355 West Bangs Ave. in Neptune.

Press Communications, the owners of the station, made the switch at noon on Monday, to appeal to the 18 to 44 age range.

How stupid is this decision by Press Communications? If you live in the Jersey Shore area, you know that G-Rock was all over the place up and down the shore during the spring, summer, and fall seasons. They were a household name in terms of the radio world…and they’re rewarded for their excellent marketing and advertising by being taken off of the air? Who’s making these ridiculous decisions in the terrestrial radio world?!

I was glad to read that there is going to be a protest outside of the Press Communications building tomorrow. Though I can’t be there, I agree that G-Rock Radio should be brought back. Since I’ve picked up Sirius XM there have only been a few times that I’ve been forced to listen to old-fashioned, boring, censored radio. During those times the only stations that I listened to were G-Rock Radio and NJ 101.5-FM. This was a good channel and I guarantee that it’s a bigger money-maker (and crowd pleaser) than Hot 106.

Watch – taking G-Rock Radio off of the air will be one of the dumbest moves in Press Communications’ history.

Some Thoughts on Last Night’s Lost Premiere

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Last night saw the return of ABC’s Lost and a return for ABC to good Wednesday night ratings (though FOX came out on top last night). After watching last night’s two-hour season premiere, though, I think something is very wrong with Lost…and I think it’s the creativity factor.

Part of this problem lies in the fact that Lost creator, JJ Abrams, is no longer working on the show. This is typical of Abrams who is getting a reputation for starting a project and then leaving before the project is completed. I hope he doesn’t do that with Fringe on FOX because that’s becoming one of my favorite shows, too, but I digress.

My main problem with last night’s episode was that the creativity factor seems to be gone (or drastically reduced). For example, Benjamin Linus is plotting to get everyone back on the island and in the midst of his plan he walks into a butcher shop and, miraculously, the butcher lady knows everything and starts talking to Ben about his plan. What? Then Ben runs into a problem when Hurley gets himself arrested and it seems that he cannot return to the island. What does he do then? He walks into a temple of some sort which happens to be where some old lady appears to be marking the movement of the island. What?

Hardcore Lost fans would argue that finding out the answers to these questions is what this season will bring to the table. I disagree. Lost has proven that it won’t answer as many questions as it asks and with a set time frame on how many episodes are left in the series, I don’t think that the writers are creative enough to bring satisfactory conclusions to all of the open questions. As I was texting a friend of mine last night, I’ll begin to be pleased when I know the full story of the original Hostiles who eventually became the Others. Once we get that out of the way, I’d probably be less harsh on a random butcher lady being a key to Ben’s puzzle.

The writers need to be careful with the whole moving through time thing because it becomes very tiresome, very quickly. Nobody is interested in watching a show that you have to struggle to keep up with on a variety of levels. I’m not saying the show shouldn’t be for intelligent, quick witted audiences like Arrested Development used to be, but I am saying that the more aggravating thought you have to put into watching each episode, the less enjoyable watching becomes.

In the next episode, I need to see more about Daniel Faraday and more about how that secret room at the bottom of the island was accessed if the Asian guy who seems to be leading the Dharma Initiative didn’t instruct his team to get into the hole. I also want to know why Faraday was at the digging site so many years before Lost takes place. Has this guy been time traveling for a while? Putting that out there, I have to admit that it’s getting a bit repetitive to have an abundance of questions coming out of each episode of Lost.

The first season of Lost has to go down as one of the best seasons of television in history. It was dramatic, thought-provoking, interesting, and it kept you glued to your seat. The second season dragged a little bit and the third and fourth seasons were duds for a lot of fans. Last night’s opening episode for season five really tried to get back some of that aura that the first season had, but I don’t think it accomplished its goals.

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