On May 1st 2012 SiriusXM (SIRI) will release 1st quarter 2012 financial results. This report will be significant for many reasons: Car sales have improved year over year, the new Lynx radio has been released, the online player and streaming mobile apps have been updated with improved functionality, time shifting has been implemented as well as the addition of Xtra channels, oh and Howard lost his law suit over subscriber goal compensation. The most significant to me (and what I'll be most interested in learning about) is whether or not the price increase that SiriusXM instituted on January 1st 2012 had any impact on subscriber cancellations (churn).
SiriusXM's self-pay subscribers are a combination of Lifetime, Monthly, and Annual payers. It is unknown how many are in each category, but it is safe to say that millions of subscribers have now had time to digest the increased cost of their subscriptions and have decided either to continue subscribing or cancel. Mel Karmizan stated on Jim Cramer's Mad Money, that the reaction to the increase has been "very modest" 2 months into the current quarter.
SiriusXM added 1,700,000 net subscribers in 2011 and has guided to add 1,300,000 net new subscribers for 2012, that is 100,000 less subscribers per quarter this year. I have received my price increase and have not decided to cancel. The true churn will most likely occur for the subscribers who listen only to the music channels, as it can be argued that ad-supported free music can suffice for the casual short distance driver and listener. The more diverse content listeners have come to appreciate a "one stop shop" for news, traffic, weather, comedy and music while in the car and will remain quite satisfied with the value of SiriusXM.
My only other concern is the looming "sell in May" situation which coincides with the 1st qtr. earnings call. If you are a "long and strong" investor or a frazzled and blurry-eyed day trader, you are possibly recalling the past 2 years in (siri) from May-October where your investment descended, languished and recovered or just outright descended. Add to this the uncertainty that comes with an election year which typically freezes everything economically, and you are once again faced with the proposition to either sell before earnings, enjoy your profits and come back to (siri) with the return of the harvest moon, or you could continue to buy and hold through the summer and hope that the expectations can be beaten more soundly than a rosewood djembe during a middle-aged men's "Blame Thy Father" drum circle in a Oregonian sweat lodge.
Though I am confident that (siri) will beat expectations, I am content to sell my (siri) stock and keep my SiriusXM subscriptions while I wait for the personalized channels and On-demand listening of Satellite 2.0 (or is it Satellite 1.2?) which will eventually come as soon as the SoundExchange Mafioso debacle gets worked out. Many of you will disagree with me, but please understand, I didn't buy (siri) at $9 or at $.05. I have no children entering college for another 12 years and am not buying or remodeling a home or planning for my estate. So I will attempt to enjoy the summer on the Chesapeake Bay as I watch for the Herons, the Osprey, and those wonderfully inexplicable (siri) drops that allow for perfect points of re-entry. Good luck to all!