# 29 Million Sat Radio Subs by 2010



## Chris Blount (Jun 22, 2001)

There's another bullish Wall Street voice for satellite radio.

Alden Mahabir of Vintage Research released a research note Thursday suggesting that satellite radio could grow to more than 29 million subscribers by 2010. The big boost for the nation's two satellite radio companies - XM and Sirius - will come from automakers placing satellite radios into new vehicles, Mahabir said.

"We expect satellite radio to become a mainstream service within the decade," Mahabir said. "Satellite radio is one of the fastest growing subscription services in U.S. history, second only to DBS. We believe the industry's early success, largely driven by XM, is an indicator of the industry's potential."

Owning the network and most of the content should produce impressive margins for satellite radio once scaled, the Vintage analyst said. Mahabir said he envisions the industry having pre-marketing cash flow margins as high as 65 percent within five to six years, figures substantially higher than satellite TV's 37 percent to 42 percent range.

And while XM has a commanding lead in the business, Mahabir said Sirius should be able to compete with the satellite radio leader. "XM has a substantial lead over Sirius, a lead that will undoubtedly increase over the next couple of years, as XM's OEM partners ramp production at a faster rate than Sirius'," the analyst said. "However, we do not think Sirius' auto OEM partners will allow GM and Honda to dominate satellite radio forever."

In terms of incremental net adds, Mahabir said Sirius could eventually catch up to XM - only on an incremental basis - acquiring as much as 47 percent of gross subscriber additions by 2010. "That said, we do not envision Sirius being able to overcome XM's lead," he added.

http://www.skyreport.com (Used with permission)


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## BobMurdoch (Apr 24, 2002)

Hey no problem, I own stock in both. C'Mon USA start buying the things, my kids hit college in 8 and 14 years.....


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## Steve Mehs (Mar 21, 2002)

While I would love to see satellite radio continue to grow, I think 29M is very liberal estimate. In 10 years (add another few years if you want to count P*) DBS has about ~23 Million subs. Auto manufactures can put a Sirius or XM ready head unit in every vehicle coming off the assembly line, give car buyers a 3 month free trial of the service, but that doesn't mean everyone will subscribe. Maybe 15 million SDARS subscribers by 2010, but not nearly 30.


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## BobMurdoch (Apr 24, 2002)

Don't forget that TV counts a "household" as a subscriber, while the Satellite Radio guys count each receiver sold as a subscriber. If the average house has two SAT receivers in it then that 23 million sub number doubles to 46 million Sat TV receivers in use.

Although there is a slight discount available, each Sat Radio subscriber pays a full subscription. Add in boats, cars, additional receivers for the house, etc. and the Sat Radio industry has a MUCH higher number to hit. Also, don't forget that Cable TV is a huge competitor that offers basically the same type of service. Free radio technically qualifies (and you can't beat their price) BUT people are itching for a change much like FM presented back when AM radio dominated and commercial saturatiion and homogenous content drove them out of the #1 spot.

Personally, I think that the 29 million can easily be hit. ESPECIALLY with Detroit being paid incentives to put them in their cars.


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## junyoure (Oct 22, 2003)

Steve Mehs said:


> While I would love to see satellite radio continue to grow, I think 29M is very liberal estimate.... .


If the clear channel conglomerates keep buying up airwaves and crapcasting the same 4 songs over, and over......it will be higher than 29 Mil. I subscribed to XM about two months ago and had forgotten about all the GOOD music out there.

just my 2 pennies....

-jr.


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