Sirius Launches Q4 Rebate
By Amy Gilroy -- TWICE, 11/1/2005
New York — Sirius announced a $50 rebate on several products beginning this week, as part of an overall strategy to drive subscriber growth to 825,000 new additions for the fourth quarter.
The rebate will be offered on the Sirius Starmate Replay, taking it from a suggested retail price of $129 to $79, and on the Sirius Sportster Replay, bringing it from $149 to $99. The rebate will also be available on the wearable Sirius S50, expected to ship this month, giving it a new price of $279 after rebate, said the company.
At an earnings conference today, Sirius boasted repeatedly of its fast-paced growth and its ability to drive revenue through Howard Stern’s arrival in January.
CEO Mel Karmazin said Sirius continues to gain market share. For the third quarter, Sirius subscriber growth increased “at more than double the growth rate of our competitor” he noted. Sirius claimed that year-to-date sales for all of satellite radio are up 70 percent, while Sirius sales are up 105 percent.
Again, the executive cited retail market share figures from The NPD Group, based in Port Washington, N.Y. The figures have been disputed by XM in the past because they do not include Wal-Mart and certain other retailers and do not necessarily take into account free radio giveaways.
Karmazin said Sirius’ retail market share for September, according to NPD, was at an all-time high of 56 percent, or 54 percent with an adjustment for Wal-Mart. The company said it expects the fourth-quarter retail share will be in the neighborhood of 50 percent, according to NPD.
XM issued a statement claiming that based on reported retail sales of both companies, XM increased its retail market share in the third quarter to 59 percent, compared to 56 percent in the second quarter.It said XM added 305,284 subscribers at retail and Sirius added 209,920 in the third quarter.
By the close of the year, Sirius is expected to have won over 3 million subscribers, to XM’s 6 million, by the claims of each company. However, fourth-quarter sales are expected to run relatively close with XM planning to win over a million new subscribers and Sirius predicting 825,000 new additions. Earlier this year, Sirius’ quarterly subscriber additions were about half those of XM; however, a third-quarter comparison for this year put Sirius at 359,294 net new subscribers and XM’s 617, 152 new subscribers. For the second quarter this year, Sirius had 365,931 new subscribers compared to XM’s 647,226.
Sirius also said it is on track to begin shipping its first wearable Sirius/MP3 product, the S50, this month, despite recent efforts by the RIAA to impose copy-protection regulations on the satellite and terrestrial digital-radio industries. Karmazin said “The way we look at the S50 is that it is a time-shifted product and the functionality is not different that that of PVRs or TiVo. If you want to record something for your own use, it allows you to do it … We believe the S50 is a legal device that complies with the Home Recording Act.”
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