Was Sirius' Bankruptcy Inevitable?
from the possibly,-but-it-had-help dept
Back in 1999, when plans for satellite radio were first talked about, I thought it was destined to fail. I had two reasons for why: I didn't think there really was that much demand and having just closely watched the disaster known as Iridium, I was intimately familiar with the massive and business-strangling capital costs associated with running a satellite-based business. It just seemed so capital intensive that any underestimate in terms of demand would kill you. And, in fact, Sirius has a pretty long history of being on the verge of failure.With the news of Sirius XM preparing for bankruptcy, it's worth revisiting those original thoughts. While I'd love to claim credit for calling this a decade ago -- I think my reasoning turned out to be wrong. I vastly underestimated the number of folks willing to sign up for satellite radio (though, I think I was correct in recognizing that the number of subscribers would need to be massive and that would be difficult to achieve). And, while the capital expenditure costs were large, it seems like they, by themselves, may have been imaginable. What I hadn't fully expected, was the massive expenses the companies (now company) would ring up trying to lock up "talent" to drive subscriber numbers up. Also, I didn't expect ridiculous regulatory restrictions. The 18 months it took federal regulators to approve the merger between XM and Sirius, combined with the ridiculous restrictions that were put on the combined company significantly contributed to satellite radio's troubles. And, finally, additional competition in the form of internet radio and podcasts/portable media really have put pressure on satellite radio -- none of which I foresaw at the time.
While the company is clearly looking to restructure and keep going, you have to wonder if it even makes sense at this point. With those alternatives increasingly becoming popular in the market, it's difficult to see how satellite radio can possibly provide enough excess value to pay for the increased capital costs compared to the competition. Even if the company restructures and comes out of bankruptcy, who's willing to bet it will have to through this whole process again in a few years?
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Filed Under: bankruptcy, competition, failure, satellite radio
Companies: sirius, sirius xm, xm
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BABA BOOEY TO YOU ALL.
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Siri made a mess
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Sirus radio
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Anyone with half a brain could have seen this coming.
Not only did this split the potential consumer base, but the products weren't compatible, causing consumer confusion on which system to get, which was better, etc.
These two businesses shot themselves in the foot long before they even signed the first customer.
Sadly, my future plans to purchase satellite radio came crashing down when I read about the disasters stemming from the merger. The most laughable part was the entire "monopoly" it would have created (and thus, lowered costs to consumers and products). Now, everyone loses.
It'll be interesting to see if Sirius XM falls, or tries to limp on. If they should fall, wouldn't any potential startup then be a "monopoly", which is what the merger decision tried to avoid? We truly have some stupid, stupid employees in government.
At any rate, this is sad news indeed. Well, I guess listening to MP3s (downloaded at no cost) continues forth for me.
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XM Was Hot!
The reason XM Sirius is doomed is not what you said before. As a radio service, people who love radio love satellite radio. The reason it is doomed is the way over priced personalities like Howard and Oprah. There is no way Sirius made its money back on the Howard contract. Those were absolutely losers. So now the smerged company is ladened with all this expensive personality contracts while it is gaining no subscriptions.
Oh, and Sirius is not as good as XM. The radio format is too close to top 40 play - the play lists are tight and tired. For example, Sirius cut XM Cafe - one of the more popular XM channels. In its place are stations with top 40 format (pop, alternative, whatever, they still only play "the hits" and just a few of them). If you cant differentiate from FM radio - well, the subscriptions will cancel.
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Re: Iridium
One problem with Sirius that hasn't been mentioned is that they have made a large number of ridiculous programming changes in the past year, removing popular channels without notice and with no recourse for subscribers. When the XM merger finally went through, Sirius seemed to start choosing music from an entirely different playlist, losing anything 'alternative' or edgy and leaning more towards disco and pop. Annoying DJ's now yammer through our favorite songs, and idiotic 'news' updates interrupt our listening.
Like many subscribers, I have been renewing my Sirius radio on a month to month basis, just to see how else they were going to screw loyal listeners.
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Re: XM Was Hot!
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RE: XM Was Hot!
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XM No More
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XM vs Sirius
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I'll stick with them
I do a lot of traveling and not having to search for new fuzzy channels every hour is worth it for me. I'm a big talk radio fan, and there are no free alternatives out there that could compete. Regular radio has too many commercials and different content in every town which is a massive hassle.
Internet radio can't compete in my car, I won't pay $150/month for an iphone with a data plan, my $12/month for Sirius makes a whole lot more sense.
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Re: XM Was Hot!
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Merger killed creativity and competition
Now the merged services are still only distinguished by the talkers, as the music is 100 percent the same on both services, with deep playlists being weaned away.
I'm down to one Sirius radio, from one Sirius and 2 XM. That may end when their Left channel loses its Sirius only personalities.
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Re: XM Was Hot!
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100's of channels and nothing on :)
Sadly, with that said, we have 5 XM radios active right now. I guess I just keep hoping that I'll find something worthwhile to listen to. This latest notice of price increase will probably cost them 3 of my radios/subscriptions. Can't justify it now and definitely don't want to pay more for something where I literally can't find anything decent to listen to on it that I can't find on AM/FM.
Freedom
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Satellite radio
The Sirius vs. XM discussions are specious - if you listen to radio in your vehicle alot, satellite radio was the only choice. My current setup allows me to hook up my iPod to my car stereo, but even then, I still listen to Satellite. The discussion isn't about wether Sirius is better than XM - it is about the potential loss of a great service. My only fear is that if Sirius XM does restructure, and re-emerge, they will add commercials to there music channels, and then I'll be forced to cancel my subscriptions.
I could go on and on about how much I hate today's putrid programming on FM by robo-troid dweebs, forcing the latest teenybopper garbage on me, but then I would be just stating the obvious.
I'm gasping for breath, hoping against all hope that Sirius XM won't abandon their original promise to us... music without commercials, and without dipshit commercials...
Maybe we should petition the FCC and congress to bail them out, and keep us from the horrors that are modern FM radio.
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Re: Satellite radio
-my apologies
Jeff
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xm
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Re: Anyone with half a brain could have seen this coming.
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The last nail...
There are no "personalities" worth $120/year of my money, no matter how foul-mouthed these sophomoric jerks try to be.
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What about car based XM?
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Iridium?!
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Sirius XM
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Re:
Obviously, they need money, because here are the details of a mailer I just got from them. They are getting rid of the free online offering, but if I re-up my main subscription right now, I can get the premium online service for $2.99/month.
Basically, they are lowering the value of their online offering, and asking for money on top of that. Shouldn't it be the other way around? They should be trying to add value to the online offering if they want us to pay more.
The Stern-tard above me said it right, online is cheaper and they should be adding more value to it, not taking it away.
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Still running two companys under one roof ?
DUPLICATION DUPLICATION DUPLICATION
What we are seeing is two ships going down ..........
SOS CUT THE FAT TODAY
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XM/Sirius
Now I have Radio Margaritaville and a variety of good stations with MLB baseball.
What more do you need??
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"thought it was destined to fail..."
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Re: "thought it was destined to fail..."
Um. I don't do that. What I actually did was LINKED to a post I actually wrote back in 1999 where I actually SAID that it was destined to fail.
I wouldn't have said that if I didn't have the proof.
Either way, if you read the rest of the post, I explain how I was *wrong*. Or, rather, why I was right, but for the wrong reasons. This is hardly retroactively patting myself on the back.
Please read what I wrote before you trash it. You're only showing your own ignorance.
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I've been disappointed...
At this point I almost wish they would crash and burn to put me out of my misery.
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long time user
I'll miss XM when it's gone. It's partially dead now, with all the sirius crap programming. We like to listen to the 80's channel while commuting, but lately, we hear the same song two or three times a day. Seriously???? It was a DECADE worth of music, I should NEVER hear the same song in a day!
At least the comedy channels are still good :(
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Sirius' Bankruptcy Their Own Fault?
Question, as these companies sink into oblivion, how come we never hear of folks like Howard offering to "refund" a portion of their compensation so that these companies can survive?
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Wasting money
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The reason I want to listen to a service like XMSirius is that its uncensored and edgy. When the powers that be remove that perk from the equation then they end up no better than the garbage we are forced to listen to on over-the-air radio.
Paying Stern a half billion, jumping through the hoops of special interest groups and political grandstanding all did their part in bringing the services down.
Internet radio anyone?.......oh......wait.....
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Re:
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Howard
Since the merger the company is not losing subscribers and they boast 20 million to date, a number most never thought possible. After a restructuring of costly talent things should look up for SIRIUS XM. Demand has been proven, therefore barring a prolonged depression this excellent product is not going anywhere .
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Howard
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But this was kinda creepy....happened today
A privately owned U.S. communications satellite collided with a defunct Russian satellite in the first such collision in space, a U.S. military spokesman said on Wednesday.
The collision involved a spacecraft of privately owned Iridium Satellite LLC and a "non-operational" Russian communications satellite, said Air Force Lt. Col. Les Kodlick of the U.S. Strategic Command.
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Hit by the 24 hour rule...
One of their satellites collided with a Russian satellite (http://news.yahoo.com/s/ap/20090211/ap_on_sc/satellite_collision) ... Nicely done!
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What a coincidence
Iridium, is a company I am not all to familiar with. They seem to be doing everything else the cell phone providers are doing, except they are claiming to do it much better and at much greater distances.
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Re: Re: Iridium
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Re: Satellite radio
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sirius
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Re: Anyone with half a brain could have seen this coming.
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sirius
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Too much $ for hosts vs quality of investment..go back to roots...
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Re:
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Re: XM No More
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Re: 100's of channels and nothing on :)
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Re: Wasting money
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Re: sirius
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sirius/xm
You know the one in Washington - I think it may also be called congress.
GEEEEZ - How could a simple 18 month delay have any effect on the merger - also how could taking on silly and foolish debt such as Sirius did when choking down XM - you know like paying off XM`s mothers bingo debt`s....
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Re: Re: sirius
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Sirius is super
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Re: Re:
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Re: Satellite radio
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Re: What about car based XM?
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Re: I'll stick with them
Sirius always works everywhere without hassle.
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