Sirius XM Merger PDF Presentation

[Mutt]

Sirius has this PDF available on their webcast page which spells out everything. This PDF contains the "slides" that Mel was talking about.

http://investor.sirius.com/downloads...tion022007.pdf

[Mutt]

Here's what i got out of it.

- they want to complete merger by the end of 2007

- The best content from each system & eliminating duplicate channels. it will be the best from each. we will be losing some channels but we'll pick up some good XM channels.

- The best management from each company. this means people are going to lose jobs.

- No new brand name yet

- the merger will save money. cut the expenses & duplicate positions. they will be more efficient and be able to take money that was being wasted to compete wiht one another and focus it on competing with all of the alternate music sources.

- the combined product development teams will be able to produce better radios

- more attractive to national advertisers. the combined company will have over 14 million listeners and advertisers won't have to pick one or the other.

- sat radio has to keep competitive with all of the new music options people have. ipods, cell phones, internet radio, internet ready PDAs & phones, HD Radio, FM Radio, car radios w/ mp3 jacks, etc. They will have to stay vigilant and profive a better product at a lower cost.

- they will stay with commercial free music channels

- Mel confirmed what I had assumed yesterday. They will start sharing content in the beginning. both XM & Sirius satellites will transmit the same programing. this will bring the combined programing to current XM & Sirius radios without any upgrades. The new radios will be able to pick up signals from either satellite system. giving the newer radios improved reception from sats & repeaters. the will always remain backwards compatible to the existing radios.

- it is not an option to abandon/sell any of the satellite. these satellites have 15 years of use left on them. the money has already been spent to build & launch them so they will continue to use them. they have existing customers and will always remain backwards compatible. to do so they need both XM & Sirius sats.

- the new satellite Sirius V will still launch in 2008. no changes will be made to it.

- the buzz word of the webcast was Synergy.

- Mel Karmazin & Gary Parsons are aware that raising rates will lower subscriptions which is something that they do not want. they were competing with free radio and not with each other. this merger will not effect a rate hike. Over 90% of the market is still listening to radio for free. the only things that could cause increases are future features like video, live traffic, and marine weather. these would all be optional ala cart addons.

- Gary suggested that they may put together a limited channel package at a lower rate. this reminds me of the cable packages where you can get the minimum for cheap and then sign up for bigger packages for more. This sounds like a nice way to charge extra for premium channels like Howard but they've already said they aren't raising the rates.



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[Mutt]

there's been alot of talk by the doom sayers about possible rate hikes so i've done some math to help this all make sense. they are thinking that now that they don't have to compete with one another, that they can charge anything they want. as mel explained, they weren't competing with one another, they are competing with FM, ipods, cell phones, streaming audio, etc. This merger is going to take a year and both Mel & Paul said that they will not be raising rates when they merge. just accept the good news. at the very least we have a promise that the rate won't go up any time soon


SUBSCRIPTION MATH

They currently bring in
$12.95 x 12 x 16 million subscribers = $2,486,400,000 per year
yes, thats 2.5 billion a year

If they add $1 to subscription & they raise it to
$13.95 x 12 x 16 million = $2,678,400,000 per year
thats an additional $192 million a year.

If they add $2 to subscription & they raise it to
$14.95 x 12 x 16 million = $2,870,400,000 per year
thats an additional $384 million a year.

Gary said that when XM raised their rates 2 years ago, they saw a drop in subscriptions. So realistically we need to change the # of scubscriptions when we change the rate. lets say they increased the rate $1 that they'd loose 1 million subscribers or $2 and they'd lose 2 million subscribers.
$13.95 x 12 x 15 million subscribers = $2,511,000,000 per year
$14.95 x 12 x 14 million subscribers = $2,511,600,000 per year
Either way raising the rates would realistically only bring in 25 million per year. More importantly, the new sub rate would be down and it would drastically hurt he growth of the company. Financially, it's not a sound plan for growth.



now if they can increase subscriptions 2 million
$12.95 x 12 x 18 million subscribers = $2,797,200,000 per year
thats an increase of $311 million per year without changing the rate.

even if they drop the sub cost by $1 to help sales. it's still
$11.95 x 12 x 18 million subscribers = $2,581,200,000 per year
thats an increase of $95 million per year.

what i'm trying to say is they could in theory drop the price and still make more money than if they raised the rate. plus, a lower rate could improve the sub rate and help the company grow.


ADVERTISING MATH

Advertisors spend $200 billion a year on radio ads. Sirius & XM get almost none of it. if they can get a bigger piece of the $200 billion dollars, the company can make more money than it ever could on subscription rates . they currently have 10% of the radio listening audience but they have less than 1% of the ad dollars. they know that's where the money is. building the audience will make it possible to steal ad dollars away from FM. to do this they been more subscribers. 10% of the ad dollars is $20 billion dollars a year. that's almost 10x what they are making now. if they can get it, i don't think they'll need you're $12.95 a month let alone have to raise the rate.



I just checked and both XM & Siriuscharge $12.95 per month. the $9.95 deals are for people who pay in advance for 3-5 years. it's like the $500 lifetime plan Sirius has.

[Madipuppy]

Originally Posted by me? housenigger

As long as subscriber fees don't increase, i'm cool.

exactly and if there is no tier pricing for Howard or specific sports. I am crossing my fingers.

[Mutt]

Originally Posted by me? housenigger

As long as subscriber fees don't increase, i'm cool.

stop with the doom messages. you guys are always crying abotu how the price will go up. quit it. both XM & Sirius have said that the subscription price will not go up

[specialyetti]

Originally Posted by Mutt

stop with the doom messages. you guys are always crying abotu how the price will go up. quit it. both XM & Sirius have said that the subscription price will not go up

Thank all that is funny , Your on top of thing Mutt. Thats the first thing that I got out of this so far.

[Ccorpse]

Originally Posted by Mutt

stop with the doom messages. you guys are always crying abotu how the price will go up. quit it. both XM & Sirius have said that the subscription price will not go up

and someone said they'd never merge. prices always go up. don't fool yourself.

[AnfKid]

Originally Posted by Mutt

Here's what i got out of it.


- The best content from each system. this means to me is we won't be keeping all of the channels / shows. it will be the best from each. we will be losing some channels but we'll pick up some good XM channels.

- The best management from each company. this means people are going to lose jobs.

- No new brand name yet

- the merger will save money. cut the expenses & duplicate positions.

- the combined product development teams will be able to produce better radios

- more attractive to national advertisers. the combined company will have over 14 million listeners and advertisers won't have to pick one or the other.

- sat radio has to keep competitive with all of the new music options people have. ipods, cell phones, internet radio, internet ready PDAs & phones, HD Radio, FM Radio, car radios w/ mp3 jacks, etc. They will have to stay vigilant and profive a better product at a lower cost.

Thanks mutt. much appreciated.

[P-B]

Originally Posted by Mutt

- The best content from each system. this means to me is we won't be keeping all of the channels / shows. it will be the best from each. we will be losing some channels but we'll pick up some good XM channels.

This is my big concern. Who decides which company has the better programming amongst the similar channels? I was looking at XM's lineup and their 50's channel looks awful (just as one example). Who wants to hear Percy Faith followed by Little Richard?

[Mutt]

graph showing how small satellite radio is compared to the competition

[Mutt]

Originally Posted by Ccorpse

and someone said they'd never merge. prices always go up. don't fool yourself.

I'm being realistic and you aren't. I know in time all things go up. hell, bread used to be a nickel. What i'm saying that merger won't cause it to go up. there's too much competition out there. they aren't going to make their money by charging each subscriber and extra buck. they are going to make their money by get more subscribers. jacking the rate up is not going to bring in subscribers. they need to make it easy and affordable. otherwise people will just use an ipod.

[AnfKid]

johnny fraddo who!??? this site always has new drama. now mutt's gona have to pull more hair out cuz cunts are gonna do nuthin but make threads screaming "prices are going up i knew it." "if they raise prices, I'm dumping my sub."

stop speculating. they don't even have a company name yet. all this could be beneficial for customers fools!!

Ive had vonage since the beginning.. they did so well and wanted to be even more competitive in the market, they actually LOWERED prices FOUR separate times.

[Ccorpse]

I'm hoping for the best. I have freinds that swear by XM, I enjoy Sirius. If anything I hope this will improve the online chanels too. Sirius sucks compared to XM as far as listening online. I know, I listen all day at work (to Siruis) but have a freinds password for XM and the amount of channels compared to Siruis is better, not so much the content.

[specialyetti]

Originally Posted by Ccorpse

I'm hoping for the best. I have freinds that swear by XM, I enjoy Sirius. If anything I hope this will improve the online chanels too. Sirius sucks compared to XM as far as listening online. I know, I listen all day at work (to Siruis) but have a freinds password for XM and the amount of channels compared to Siruis is better, not so much the content.

I've never heard "X.M" put up a shit load of repeters all over Florida. My Sirius has been great no complaints considering how new this is.
All my family lives around Rochester , weather sucks .

[sternowitz]

I heard that each service will be liquidating some of their duplicate assets and that includes at least 2 satellites. XM has a deal with cingular, cingular is likely to take their satellite, sirius also has a deal with another satellite company, that it will likely sell to.

For the consumer, this is not really a win win situation. For sirius consumers, I am thinking tha tyou will now have to spend extra money for nfl, mlb, nascar and even HS