Debt, Delisting and Disgruntled Users


Oct 15, 2008
source orbitcast

The annual shareholder meeting is only a couple days away, and Sirius XM Radio Inc. is facing a trifecta of negativity surrounding the company. Shareholders are angry. Subscribers are angry. And pundits are opining over the death of a medium.

A recent article in BusinessWeek underscores the negativity. Not only is the economy in the toilet - causing strains on revenue streams from OEM and retail channels - but the company still needs to refinance $1 billion in debt that's coming due in 2009. And that includes $210 million in February. Add to that the threat of being delisted from NASDAQ, and the oh-so-popular reverse stock split.

So now you have analysts and pundits questioning the entire business model - from the use of expensive satellites to high-priced programming agreements.

"They made a mistake in their programming contracts," says Paul Gallant, senior VP at Stanford Group. "It's like an albatross around their neck."

"There are lots of ways to distribute programming, and satellites may not prove to be the ideal way," says Max Engel, an analyst at Frost & Sullivan.

"Sirius may be artificially limiting its scope by relying on satellite technology as a delivery vehicle," says Susan Kevorkian, a program director for researcher IDC.

But wait, there's more.

It's not just "experts" that are negative about Sirius XM, angry subscribers continue to fester negative sentiment over the combining of channels. It's been a month since the switch was thrown, and the unhappy narrative continues. In the middle of the Holiday season nonetheless. I don't think the company expected the backlash it received, or that it would continue the way it has. But during a period of much-needed retail sales, it's crucial that satellite radio is part of a positive word-of-mouth conversation, and all it's getting right now is negativity.

Reality check: not all subscribers are unhappy. Another reality check: the online population of subscribers doesn't necessarily represent the entire population of subscribers. But you know what? Most people don't think about that. More importantly, potential subscribers don't know that. And even if it's the vocal minority (is it?), it's still vocal - very vocal. When entire articles are written about how unhappy subscribers are, guess what the general conclusion is?

At Thursday's shareholder meeting, Mel Karmazin doesn't need to just address the fear and loathing spawning from investors and analysts, but he needs to address the disheartened subscribers. And wrap it all with open and honest candor.

We all know the economic climate is bad right now. We understand that Mel isn't happy with the shareprice. We get that there needs to be a lot of belt tightening in order to get through this mess. And that means jobs, and shows, and channels. But it shouldn't be at the expense of simple communication.

What people are looking for isn't acknowledgment, it's vision. A plan. Clear, and concise leadership. And open communication at all the touchpoints.

Companies always try to "control the message" to shape themselves in a positive light, but when you're pushing 20 million subscribers (and over 40 million listeners), you can't control the conversation. The only thing to do is to be part of it.


New Member
Nov 13, 2008
source orbitcast

Companies always try to "control the message" to shape themselves in a positive light, but when you're pushing 20 million subscribers (and over 40 million listeners), you can't control the conversation. The only thing to do is to be part of it.

i completely agree with this!!! every statement i have seen from anyone at SiriusXM since the merger has been with their nose in the air downplaying any subscriber discontent. the closest thing to an acknowledgment was from Mel telling us we should keep paying even if we are unhappy with the new lineup.

they have all been towing the company line and standing strong like everything is ok. this facade can only last so long before the bottom falls out. now at least with the reported return of backspin and the strobe they have shown that they have the ability to listen.

one can only hope this is the beginning of a better two way relationship between sirius and it's subscribers...


Active Member
Oct 30, 2008
This merger deal has been nothing more then a fine example of piss poor management from not letting subscribers know the channel lineup change , to taking away channels as disorder they have been doing a horrid job , but hopefully things will change.

At least Sirius has the BCS games back on its air this season but thats a whole different discussion for the NCAA forum.


Oct 11, 2008
Baltimore, MD
Forget it

This stock is fucked. No matter what they do with this crazy reverse split idea. I see its even reached as low as .08 this year. And keep in mind this is AFTER

1) Stern
2) Merger
3) OEM deals
4) Enormous subscriber growth

Mel should look at his wall and read the handwriting.