SiriusXm: MAYDAY! (Letting The Past Be My Guide)

    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!

Sirius XM: The "App" Pathetic Approach

...First things first. "Dear valued subscriber?" Since I have not personally received the email notification and have only seen the email second hand on several occasions, would I be correct to assume that I am not in the "valued" subscriber category? It certainly feels that way. Secondly, the perceived value of a subscription is a completely subjective premise. If you signed up for a subscription in 2001-2006, you will likely agree that both Sirius and XM have each added more variety and exclusive content over the term of your subscription and a price increase can be rationally justified.

If you signed up for Howard Stern, (as I did) the added value proposition becomes a bit flimsy, due to the fact that I am actually getting less value since Howard reduced his "live" weekly contribution by 25% and I have since been charged to use the internet feed, which was originally offered as complimentary, as well as the increased charges for additional subscriptions and new royalty fees. Upon the release of the mobile apps, Stern fans were shocked and dismayed after signing up for the $2.99/mo. service only to find that the "King of All Media" (some media apparently) was not available until his latest contract was negotiated and signed last December. To this day under the Sirius XM Appstore reviews, potential new subscribers are greeted with this horrendous and currently inaccurate 1 star review and rant that is visible by default as the most helpful: "No Howard 100/101?? Are you...

Read more on Seeking Alpha: http://seekingalpha.com/article/307359-sirius-xm-the-app-pathetic-approach

Confident That Sirius XM Can Justify Price Increase

Sirius XM (SIRI) was given a serendipitous settlement earlier this year in the Blessing v. Sirius XM case. Not only did Sirius XM essentially get away with the implementation of a royalty rate increase and a higher cost multi-account user discount as well as charging for the previously free internet stream and mobile app access (all of which successfully circumvented the FCC "mandated" yet "voluntary" 3 year price freeze negotiated in the horrendous record-length merger debacle and approval process that all but ensured the likelihood of bankruptcy in early 2009), but furthermore, Sirius XM was able to escape the enormous triple damages related to a potential anti-trust ruling.

Sirius XM emerged from the relatively small cost of the plaintiff's attorneys fees, discounts and another dictated price increase delay. Sirius XM is restricted from raising prices until January 1, 2012. However, the current ruling is under review as the judge agrees to hear objections.

Sirius XM's stock price skyrocketed after the 1st qtr conference call when it was learned that Sirius XM was considering a price increase this year. On May 3, 2011 Sirius XM's CEO Mel Karmizan stated:

You are also aware we have been driving our top line growth while being restricted by our commitment to the FCC that we would not raise our base price in the first 3 years following our merger. That commitment will expire in the third quarter of this year. SIRIUS has never increased our base price of $12.95 since we started...

Read More On Seeking Alpha: http://seekingalpha.com/article/287579-confident-that-sirius-xm-can-justify-price-increase