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SiriusXM Outlines Plans As Revenues Hit Record

2/13/2012 12:01:00 AM Eastern

NEW YORK – SiriusXM plans to add on-demand and
personalized radio services this year to its Internetstreaming
service, and the broadcaster will roll out
Satellite Radio 2.0 service through automakers for the
first time this year.

That was the word from CEO
Mel Karmazin last week in announcing
the company’s second
consecutive year of profitability.

Net income rose in calendar
2011 to $427 million, up from
2010’s $43.1 million and compared
with a 2009 net loss of
$352 million.

Full-year revenues hit a record
$3.01 billion, up 7 percent, and
full-year net subscriber growth
hit 1.7 million, up from 2010’s
1.42 million net subscriber gain to mark the highest
number of annual additions since the Sirius and XM
merger in mid-2008. The company ended the year with
21.9 million subscribers, up 8.4 percent from year-end
2010’s 20.2 million.

The fourth-quarter net subscriber gain was 542,966,
up from a year-ago 328,789. The quarter’s net income
hit $71.3 million compared with a year-ago $81.4 million
net loss. The quarter’s revenues grew 6.5 percent
to $783.7 million from a year-ago $735.9 million.

SiriusXM tuners were factory-installed in 67 percent
of new vehicles sold in the U.S. in 2011, up from 62
percent in 2010.

The company posted a record 8.7 million gross additions
in 2011, in part due to its growing emphasis on
reactivating OEM satellite radios in used cars but also
due to a 12 percent increase in new-car sales.

The new-vehicle conversion rate for SiriusXM of promotional
to consumer-paid subscriptions slipped for
the year to 45 percent from 46 percent.

In its 2012 forecast, the company said it expects to
add 1.3 million net new subscribers, down from 2011’s
1.7 million, thanks in part to a forecast 8 percent rise
in new-car sales to 13.7 million, the phase-in of a rate
increase that began Jan. 1, and higher revenues from
reactivating OEM radios in used cars. The company
forecasts 2012 revenues will rise almost 10 percent
to $3.3 billion.

To help boost revenues and remain competitive
with free terrestrial radio and Internet radio, SiriusXM
plans sometime this year to launch on-demand programming
for users of its Internet streaming service
to PCs, home audio equipment, and smartphone
apps. Consumers will be able to access a continually
updated music library and listen on their own
schedules, said Karmazin. The company will also offer
personalized radio over the Internet so consumers
can tailor content to their own preferences. Both services
will be added for free to the company’s streaming
service, which costs as little as $3.50/month to
satellite-radio subscribers.

Also to boost subscriptions, automakers will roll out
Satellite Radio 2.0 service in 2012, but SiriusXM didn’t
say how soon that would happen or how many automakers
would participate this year.

Satellite Radio 2.0, not available in previous-generation
tuners, expands the broadcaster’s lineup by 22
channels, with eight more to come in the future. New
channels already available include the new SiriusXM
Latino suite of Spanish-language programming.

Also in the OEM market, SiriusXM plans satellite
radios that offer features currently available on its
$249-suggested Lynx aftermarket dock-and-play tuner,
which became available late last year. Although the
company didn’t specify which features would migrate
to the OEM side, Lynx’s features include time shifting
to record and store up to 200 hours of programming,
ability to simultaneously record multiple channels, and
pause and rewind of live programming. Lynx also accesses
on-demand Internet-streaming content via Wi-
Fi when docked at home or, when running on its internal
battery, when used in a Wi-Fi hot spot.

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