Sirius Subscriber Losses Getting Serious
by John Paczkowski
Posted on May 7, 2009 at 7:24 AM PT
Good thing Sirius XM Radio resolved the debt issues that threatened to drag it into bankruptcy earlier this year; the company’s clearly got other things to worry about. Like fleeing subscribers (see table below; click to enlarge). Reporting a first-quarter net loss of $236.6 million this morning, Sirius (SIRI) said that anemic car sales had led to its first-ever decline in net subscriber additions.
And it was a nasty decline.
The company ended the quarter with 18.6 million subscribers–up 3.5 percent from a year earlier but down 404,000 subscribers from the preceding quarter. Sirius added 1,338,961 new customers. But it lost 1,743,383.
Given that and the state of the auto industry on which the company is so dependent for new subscribers, how will it ever attain CEO Mel Karmazin’s goal of 20.6 million subscribers by end of ’09? Hard to say, especially when Sirius expects to see another “noticeable hit” to its subscribers in its next quarter. That didn’t stop the company from raising its 2009 forecast to $350 million, adjusted from more than $300 million. Karmazin said that “satellite radio is now a cash flow growth story.”
Tell that to your subscribers.
Comments
as a longtime subscriber, allow me to explain some reasons why they are losing numbers:
1. Mel promised Congress lower prices, but prices have gone up. Threating emails came out about 6 months ago to re-up or face higher prices.
2. Sirius took away the free internet-based account that used to come with a subscription to many listeners, now making it an additional $2.99 monthly fee. Fail.
3. a-la carte pricing is only for the worst content. Try to get Howard Stern or sports subscriptions a-la carte? No dice.
4. where is the iphone player app?
5. Sirius screws their fans in the web-development community. The online community developed better internet players (starplayr) that kept many features of the radio hardware, ENHANCING SIRIUS’S VALUE. Much better, less buggy than Sirius’s own player. Sirius gave them a cease-and-desist, so I’m stuck with a buggy program that times out on me all the time.
6. Since the merger, Sirius adopted XM’s strategy of more DJ banter on the music stations. This devalues the music channels – most of us got Sirius to get AWAY FROM commercials and DJ prattle. Shut them up and get back to playing good music.
7. Sirius acts like the phone companies – I had 3 accounts, told them I was going to cancel one of them due to the price increases. Rep says “sorry to hear that”, offers me a “free” low(est) end player for me to keep the account (I already have a player since obviously I already had the account, so what is a cheap 4th player going to do when I’m trying to cancel my 3rd account?). 3rd account canceled. Within 3 weeks I’m getting the Sirius “we want you back” emails with freebies. Now that I’ve had weeks to live without it, guess what? No thanks. Classic sales/marketing 101 blunders – no attempt at customer retention, reps don’t have (or don’t use) tools for turning around a sale, and their resign requests have absolutely no message or attempt to understand why I canceled in the first place.
Add all that up and you have a company hemorrhaging money and losing subscribers, but doing nothing to help the situation. Howard might be gone in about 18 months, they had better figure something out soon.
Posted by Bill Adams at May 7th, 2009 at 12:02 pm