The recession is not helping Sirius XM (SIRI) radio as car purchases stall and competition increases.
Blow-by-blow from today’s earnings release:
- The satellite radio monopolist said it lost 400,000 net subscribers during Q1, finishing the quarter with 18.6 million subs.
- Retail subscribers — those who sign up for Sirius on their own, not by buying a new car — were the biggest defectors, at 370,000 net sub losses, down from 49,000 net sub losses a year ago.
- But “OEM” subscribers — people who get Sirius radios built into their new cars — plummeted much faster. During Q1, a net 38,000 OEM subs left Sirius, almost 700,000 subscribers worse than net sub growth of 659,000 a year ago. A lot of that can be blamed on Detroit’s downfall.
- Churn, the per cent of customers who ditch the service each month, increased to 2.2% from 1.9% a year ago.
- And Sirius XM’s conversion rate — getting people to sign up for paid service after it’s free for a while in their new car — fell to 45%, down from 51% a year ago.
At this rate, it’s going to be very hard for Sirius to grow subscribers 8% this year, as the company predicted last November. That’s one reason why shares are down 18% to $0.43 today.
The (mildly) better news: Sirius expects to report more than $350 million in 2009 adjusted income, up from its previous guidance of $300 million. Still, an ugly situation that has no reason to get better.