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XM Radio predicts it will have 350,000 subscribers by year end
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..."

...

...
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
Hours/week of XM in-car listening
x 14
Listeners per XM subscription
x 2
Pctg. of time spent with XM
x 100%
Hours per broadcast week (6A-12Mid)
div by 126
 
---------
Projected XM AQH (Dec '02; in-car)
77,777

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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Loudeye's customized broadcast system granted U.S. patent
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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    Kurt, this is deep background -- don't quote me!

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Fictional facility offers care for those with technological difficulty
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.

 
 

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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