Let’s just get it out on the table. The subscription radio business is a terrific model. But the delivery method of satellite is simply not viable because it is not cost effective, and it is grossly overcomplicated.
And, that is, not financially viable with just today’s financial pressures. Sirius XM can’t even pay the bills they have, let alone any new obligations.
When the new high speed internet networks arrive–which for it to consistently stream an audio program and provide nearly ubiquitous nationwide coverage will not be as long as you think–look for either the Sirius XM delivery model to change (if they are still alive) or look for them to get eliminated by the emergence of a low-cost competitor. Hint: anyone who owns a sliver of nationwide broadband spectrum can move into this business fast. And with broadband, issues like line-of-sight are a thing of the past.
To be fair, Sirius XM as a company might survive in some form because they have the two key ingredients to success for any subscription-based business: customers (nearly 10 million of them) and established content that those 10 million users are willing to pay for.
But at some point, you have to get serious: If you have a lick of sense, you know the way forward for the common stock is to be zeroed out.
Disclosure: As of publication I have no position. I am not a professional, but I am trying this at home. It is highly recommended that you consult a licensed financial advisor or broker before making any and all investment decisions.
Tags: Business And Life by HJ
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