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BY PAUL MALONEY
XM Satellite Radio is counting on having 350,000 subscribers
by the end of the year. That projection was made by XM President/CEO
Hugh Panero, in a conference call yesterday.
(MORE BELOW)
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(CONTINUED FROM ABOVE)
He said he expects to attract 70,000 service customers by
the end of the first quarter; and 130,000 by the end of the second
quarter of this year.
Analysts do indeed seem to be satisfied by XM's expectation.
Shares of XM rose 81 cents,
or 5.73 percent, to a close of $14.95
on Nasdaq yesterday afternoon following the yesterday's fourth quarter
earnings announcement. The stock has more than doubled in value since
XM launched its service nationwide in November. (As of publication,
XM was trading at $14.71, giving XM an implied market value today
of approximately $900 million.)
In fact, Bear Stearns analyst Robert Peck, believes XM is being
conservative with their projection. He told CNet News.com (here),
"The main focus for the Street was having them come out that they
were comfortable with the 350,000 subscribers by the end of the year...That's
by far the No. 1 thing. That's helping rally the stock."
In last year's final three months, XM's (a shot of one of their
impressive studios is above) net loss grew from $14 million to $144
million in a year. The "common stock" loss was $2.26 per
share, compared with 40 cents a share during the same period in 2000.
EBITDA
(earnings before interest, taxes, depreciation and amortization) losses
for the quarter -- $113.3 million -- were significantly higher than
a Lehman Brothers projection of $75.5 million.
The company's balance sheet, however, did include $533,000
in revenue for the year (from subscriptions and advertising), again
higher than the Lehman Brothers' estimate of $413,000. (A company
press release, with all the financial nitty-gritty, is
here).
XM, which says it has enough cash to operate through the end
of the year (following a fourth quarter $129 million public offering
of Class A common stock and a $66 million financing package with Boeing,
including $35 million in new debt financing), may be in a good position
to reach its goal. According to an article in USA TODAY (here),
a report by consumer research firm Dohring showed that 16% of 2,657
people surveyed consider satellite radio important as an option in
their next car.
The Wall Street Journal (covered in RAIN
here) suggested
that with a daily burn of $1 million, the company will have to eventually
strive for a lot more than 350,000 listeners. "Lehman Brothers analyst
William Kidd reckons that XM needs 4.3 million customers...He figures
XM will need another $470 million by 2005..."
...
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...
It's
probably only fair to apply the same audience-size analysis
to XM that we've applied here in the past to webcasts.
According to patterns
in Arbitron books, the average American seems to spend about
seven hours per week
listening to radio in their car (about 1/3 of their total
radio listening time).
Would it be fair to assume that XM subscribers will
listen twice as long in
their cars as the average American does? Might we assume each
subscription will be shared by, on average, two
individuals (age 12+), either in the car together
or separately? Shall we also generously assume that XM will
get 100% of the in-car radio listening of XM subscribers?
If you use the assumptions described above on XM's
projected base of 350,000 subscriptions, you get a projected
AQH (Mon-Sun 6A-12Mid) by year-end for XM of ...
| XM projected subscriber
base (Dec. '02) |
350,000
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| Hours/week of XM in-car
listening |
x 14
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| Listeners per XM subscription |
x 2
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| Pctg. of time spent
with XM |
x 100%
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| Hours per broadcast
week (6A-12Mid) |
div by 126
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---------
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| Projected XM AQH
(Dec '02; in-car) |
77,777
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This audience size compares
favorably with major New York City or Los Angeles radio stations,
which typically have AQHs of 50,000 to 90,000 listeners --
although each XM channel, of course, would only receive a
small portion of that total listening.
(Note that the above analysis only refers to XM listening
in cars. If consumers are also listening to XM in their homes
or offices, the estimate would be significantly larger.)
-- KH
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BY PAUL MALONEY
According to a company press release, Loudeye
Technologies has been awarded a patent for its customized
digital
broadcast system.
Loudeye's system creates "mass customized broadcasts
for remote devices to generate individual playlists and target advertisements."
The U.S. Patent and Trademark Office awarded Loudeye U.S. Patent
No. 6338044 for the system.
The system can be used by set top boxes, digital recording
components, game systems, car stereos utilizing hard drives, and
commercial music appliances.
In the press release, CTO Joel McConaughy said, “We anticipate
the proliferation of the Internet enabled device market will pave
the way for new methods of content distribution that require back
end management, delivery, security and tracking. This patent reflects
our focus on customized broadcast distribution across a number of
remote appliance configurations.”
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From SatireWire: "The toughest decision: Should my loved
one be placed in an assisted computing
facility?
"For family members, it is often the most difficult and
painful decision they will face: to accept that a loved one -- a
parent, a spouse, perhaps a sibling -- is technologically impaired
and should no longer be allowed to live independently, or come near
a computer or electronic device without direct supervision.
"The time has come to place that loved one into the
care of an Assisted Computing Facility. But you have questions.
So many questions. We at Silicon Pines want to help..."
Read the entire piece at SatireWire.com by clicking here.
And thanks to sales and marketing "pro on the loose" Tom
O'Connor, who has too much time these days to spend on humor sites,
for the tip. Contact Tom at "streamdude@yahoo.com"
or 253-209-0318.
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| Feb. 7-10, 2002 |
RAB
2002: Orlando, FL |
| Feb. 20-24, 2002 |
Gavin
Seminar: San Francisco, CA |
| Feb. 21-23, 2002 |
R&R
Talk Radio Seminar: Washington, DC |
| Mar. 1-3, 2002 |
ConXis:
Conference and Expo for Internet Streaming: Rosemont,
IL |
| Mar. 14, 2002 |
16th
Annual Bayliss Radio Roast: New York, NY |
| Apr. 5-8, 2002 |
Broadcast
Education Association 2002: Las Vegas, NV |
| Apr. 6-11, 2002 |
NAB
2002: Las Vegas, NV |
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