Sirius Getting to 5,000,000 Subscribers
August 14, 2006
Sirius finished up the second quarter with 4,678,207 subscribers. This indicated an “NET addition rate of 6,600 subscribers per day for the second quarter. If Sirius were to match that pace in the third quarter, then we would be looking at an announcement of 5,000,000 subscribers by this Friday, August 18th.
If Sirius were to maintain the 6,600 per day pace for the entire quarter, they would finish with 607,200 NET additions in Q3 for a total of about 5,285,000 subscribers. This would indicate a need of slightly over 1,000,000 subscribers in the fourth quarter to meet current guidance of 6,300,000 by EOY 2006.
The street seems to expect Sirius to reach their guidance, but confirmation that the goal is attainable would likely set many minds at ease. Confirmation about approval by the FCC on Sirius hardware removed one cloud from the picture. Confirmation about subscribers being added at an appropriate pace would be a definite help as well.
If hardware availability at retail was an issue for Sirius, the question will be whether or not the Ford ramp-up will be enough to offset the potential lost sales. Ford has been adding additional vehicles to the factory install program, and a deeper penetration of installs seems to be happening as well.
Subscriber announcements always seem to be an issue that causes uneasiness in the sector. Anticipation for certain timeframes become well known, and extrapolations are done as soon as an announcement is made. It is our hope that Sirius, if they do not intend to announce reaching 5,000,000 subscribers, will at least make the street aware of this in some nature by the end of this week. Otherwise, every day that passes casts more doubt onto the issue. This is compounded by the FCC issue and hardware availability issue that had people so concerned over the past few weeks.
The irony is that even this story will somehow lead to expectations, right, wrong, or indifferent.
UPDATE COMMENT:An SSG reader offered, "You should remember that the OEM's typically have a shut-down in July, and thus OEM production will not be at the usual pace for the month, thus effecting the add rate from the OEM side. Combinbe this with a July typically being a weak retail month, and the 5,000,000 may well come later than what people are expecting."Good comments, and likely this has some real validity. The article was looking purely at the "run rate" which is what many people tend to do. It would not suprise us here if an announcement did come later than August 18th. The key of course is being able to meet year end guidance, which we feel is very attainable for Sirius.8/14/2006 02:34:00 PM
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