As XM and Sirius Satellite radio duke it out for increased growth rate, their expense rate has analysts worried. One Director has already resigned.
It's about content right? Well maybe it's about listeners.
Regardless of what satellite radio is about, the chase for both content and audience growth is causing jitters in the financial community. With a $500 million deal for Howard Stern and a $50 million deal for Oprah, the two companies are ratcheting up expenses. Add to that huge outlays for increasing the number of listeners and you have to wonder if both XM and Sirius can survive.
XM and Sirius have both added the ability to subscribe and listen online to tap into the "at work" crowd. And both companies are adressing the "take it with you" preference for most customers - there's precious few listeners who want to own multiple satillite radios at this point, each of which requires a subscription.
I still see satillite radio as an excercise in finding new ways to deliver regionalized data to the automotive market. There's just not enough value in 150 music stations when I have dozens of terrestrial stations to choose from. With about 4% of the US popultion living in a geographically rural area there's just not enough subscribers in that market to justify the expensive satellites.
I've posted a comment in the Satellite radio forum. I'd like to hear your comments too.