Let Them Know How You Feel

September 25, 2006

If you are invested in Sirius or XM there is something you should know. There are many out there who have a very strong desire to see these companies fail. It can not be stated more plainly or clearly than that.

There are also many out there that enjoy the benefits of satellite radio, and want to see these companies succeed. However, there does exist a split in the satellite radio world between Sirius and XM. Some carry so much animosity towards one company or the other that the “infighting” within the sector gives those that desire satellite radio sector failure an inroads to further drive a wedge between the two companies. Sometimes the “infighting” is not limited to the investors or fans of Sirius and XM, but it is propagated by Sirius and XM themselves. It is a tough road. These companies are competitors, and there is a natural need to compete with each other.

What is an investor to do?

First, understand the groups that want to see satellite radio as a sector fail, and the potential reasons why they want this to happen.

The NAB

The National Association of Broadcasters is VERY THREATENED by Sirius and XM. Listeners to satellite radio are not listeners to terrestrial radio. The members of the NAB are losing their audience at a rapid pace. They have an antiquated business plan, and they are coming to that conclusion to late in the game. For this reason, they are stopping at nothing to make life as hard as possible for Sirius, XM, and consumers who buy these services. If you subscriber to, or are invested in either company, you should take these NAB attacks seriously. Let your opinion be known. Contact the NAB at let them know exactly how you feel.

The RIAA

Unlike the NAB, the RIAA does not have a desire to see satellite radio fail. They DO have a desire to garner as much money as they though. Were you aware that Sirius and XM pay royalties for every song played? Were you aware that terrestrial radio stations DO NOT? Now the RIAA wants MORE from satellite radio. This organization gets more money today than they ever got before. Hundreds of commercial free music channels all playing music 24 hours per day, and with each song, the tally goes up. Sirius and XM also play diverse music, and have stations dedicated to decades gone by. Artists are receiving BIGGER checks now because of satellite radio. To be fair, artists should get paid. No one feels that their efforts should go unrewarded. However, lets try to be fair about the situation. There is currently legislation that would make free songs to terrestrial radio, and by extension HD radio, the law, while at the same time making it law that satellite radio, and other services would be required to pay more steeply. Contact the RIAA and let them know how you feel.

The Legislature

Bills are now in the legislature that would not only hamper satellite radio, but would also take away the rights that consumers now enjoy. Do you want to be able to record a song for your own personal use? If you do, you should contact your senator and let them know exactly how you feel.

Hedge Funds

Not all hedge funds are bad for this sector. When hedge funds are on your side, it can be very beneficial for investors. However, if they are not on your side, it can be very detrimental. Hedge funds have DEEP POCKETS. They have the ability to move the price of an equity very quickly, and can maintain their pressure for days on end. Hedge Funds are nameless and faceless “organizations” to the average investor. There is little that an investor can do to counteract the desires of a hedge fund. Hedge funds are very influential in an uncertain market. Investor insecurities can be played to the advantage of deep pockets.

You need to ask yourself the following questions:

Do I believe that satellite radio delivers value to the consumer?

For those that already subscribe, the answer is quite simple. For those who have not yet subscribed the answer is an unknown until they try it or experience it. With more and more subscriber joining every day, the word is spreading.

Do you believe that satellite radio is a viable entity?

Consider this. There are roughly 12,000,000 subscribers to satellite radio today. The United States has over 200,000,000 people. No, not everyone will become a subscriber, but do you think more than the current 5% will be subscribers? That is right, the penetration of satellite radio is only at about 5% right now. This is why some organizations are so fearful of satellite radio.

Why would an organization take such extrodinary steps to discredit satellite radio?

Because there is a lot at stake. Each passing quarter their business is evaporating away from them, and migrating to satellite radio. This is why you see organizations attacking these services so strongly. This is why you see stories planted, rumors propagated, and lobbyists on Capitol Hill.

What Can I do?

First. Understand that there is a time for unity in this sector. Competition between Sirius and XM is a great thing, but don’t let the “internal” competition cloud the bigger picture. Don’t let those that wish sector failure use that healthy competition as a wedge to divide and conquer.

Second. Understand where your news is coming from, and look at it more deeply. Research what is being said, and never take it on blind faith.

Third. Remember each and every day that there are powerful organizations and deep pockets that want the opposite of what you want.

Lastly. LET THEM KNOW HOW YOU FEEL

9/25/2006 11:54:00 PM

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