XM Breaks Down Subscriber Growth Results

By Amy Gilroy -- TWICE, 2/12/2004

Washington — On the heels of its announcement that it exceeded the 1.5-million subscriber mark earlier this month, XM Satellite Radio held an earnings conference to outline some of the trends in the company’s subscriber sales and comment upon rival Sirius Satellite Radio’s new deal with EchoStar and RadioShack.

The company said that 45 percent of its subscribers last year came from new car sales and that General Motors expects to offer XM factory-installed radios in 800,000 vehicles this year, increasing to 1.1 million in 2005. In addition, XM reported that more than 74 percent of its subscribers are self-paying customers, vs. those who received service under a prepaid promotion. The company expects to increase its self-paid subscriber share to almost 90 percent by the end of 2004.

About 7 percent of XM’s customers are buying family-plan subscriptions and 8 percent of the total base are pre-paying by more than one year for their XM service. Most subscribers pay 5.3 months in advance, XM said.

XM president and CEO Hugh Panero also took the opportunity to respond to the Sirius alliance with RadioShack and EchoStar. In the deal, EchoStar’s DISH Network will carry Sirius programming to most of its 9 million subscribers and RadioShack will carry Sirius’ satellite radio products exclusively in its network of over 7,000 stores.

'I think that the deal is good for the satellite-radio category. People will be exposed to satellite radio in a RadioShack store. We’re the brand leader and people traditionally comparison shop, and will be driven into Best Buy and Circuit City,' said Panero, adding that XM distributes through Wal-Mart, which tends to serve a similar audience to RadioShack.

XM has an alliance with DirecTV where the latter is a 5-percent owner of XM. XM said it could not comment on future ventures with DirecTV.