In the Wall Street Journal, Ellen Sheng today (5/3/2006) reported, “Sirius Satellite Radio Inc. reported sharp increases in subscribers and revenue but said its firs-quarter loss winded substantially, due mostly to stock-related compensation for shock jock Howard Stern. “ –Wall Street Journal, print addition. P. B3 “Sirius Reports a Wider Loss,” Ellen Sheng
I have been a fan, subscriber, and a previous shareholder of Sirius Satellite Radio. The reason why I have always been a fan of Sirius is the focus on content and service over technology. Their main competitor, XM Radio, is almost twice the size, has twice the technological capabilities, and has almost twice the financial backing; but XM focus most of its energy on securing customers through technology improvements versus content.
While XM has partnered with Sony Corp. to create a bunch of cool wireless receivers that can pickup Satellite on the move, Sirius has spent its time creating deals to make sure its content is superior to it competitor’s. Example of this is its high priced contracts with shock jock Howard Stern, the NFL, NASCAR, Martha Stewart, rapper Eminem, and extreme sports supper star Tony Hawk.
In sports there is a saying: “Offense wins games, Defense wins championships.” In the tech age of business, if propose this phrase: Tech wins awards. Service wins customers. While both tech and service are important, bet on the company that is focusing more on service.
The proof is this article.
Revenue for the quarter nearly tripled to $126.7 million from 43.2 million as Sirius continued to increase its subscriber base. It added 761,187 subscribers during the period, ending the quarter with 4.07 million. By contrast, larger rival XM Satellite Radio Holdings Inc. added 568,900 users in the same quarter. Sirius said it expect to have more than 6.2 million subscribers by year’s end, up from its previous estimate of just above six million. XM has said it hopes to have more than nine million subscribers by year’s end.
Sirius CEO Mel Karmazing has been criticized in the past for focusing so much on the content of his company and not enough on cost cutting and tech development. It looks like his focus on content is starting to pay off. I knew there was a reason I liked this company.
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