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!

SiriusXM Vs. Artists' Rights And Royalties

In determining whether or not to invest in Sirius XM for the long run, it is important to first know the numbers. For the benefit of potential new Sirius XM investors or readers, I will run through the most well-known numbers. For the rest of the Sirius XM or Seeking Alpha addicts, bear with me, we will get to the good stuff momentarily, as the propaganda and posturing has already begun in anticipation of the new royalty rates to be determined in 2013. These are the numbers that are not readily available, yet are important to understand, as they relate to future costs and Sirius XM's posture towards content creators. I realize this article will require a bit more time to read than most with regards to royalties, but you will certainly be much more informed about the issue, even with a bit of my bias attached.

The recently reaffirmed guidance of Sirius XM for the remaining part of 2011 and the guidance for 2012 stands as an impressive testimony to the inexplicable durability of this highly discretionary service. For Sirius XM, navigating though the rocky tributaries of low-cost (and, ostensibly, free) competitors that unassumingly meander to the more treacherous and angrier seas of a extraordinarily turbulent economy has not been an easy accomplishment, though you wouldn't know it by these numbers.

Q3 2011:

• Subscribers Exceed 21.3 Million, Net Adds of 334,000
• Record Revenue of $763 Million, Up 6%
• Record Adjusted EBITDA of $197 Million, Up 16%...

Read more on Seeking Alpha: http://seekingalpha.com/article/305108-siriusxm-vs-artists-rights-and-royalties

Paying The Piper: Sirius XM, Pandora & The Musical Artist

"Talking about music is like dancing about architecture."-Steve Martin

In exploring the future viability of these two types of radio (satellite & Internet) and gauging if they are worth investing in, one must first understand the cost of royalties for Sirius XM (SIRI) and Pandora (P). It is essential to assign a value to the integral component and true source of each business' growing popularity and this (of course) is the music. Although some of the creators of music share the benevolent nature of a Jonas Salk and think their music should be free, the fact remains that most artists wish to become famous, popular and ultimately...highly paid. The journey of a song from creation to exploitation is a varied and a convoluted tale, so it should best be described in broad generalities, to which I will seek to let brevity be my guide. I'll give it a shot.

"Do your job and demand your compensation, but in that order."-Carey Grant

An artist sits down with an idea, a pad, a pencil, a piano, guitar or possibly a hookah, and through the enviable alchemy of intangible inspiration or (more commonly) through the warmed-over hackery of mediocre mimicry, a song is created. This artist may be unaware that the song was automatically copyrighted the moment it was fixed in a "tangible" medium (i.e. song tablature, CD, tape, etc.) however a smart artist will also register the song with the U.S. Copyright office for verification purposes and protection... 

Read More On Seeking Alpha: http://seekingalpha.com/article/294332-paying-the-piper-sirius-xm-pandora-the-musical-artist

Sirius Investors Should Pay Attention To The Other Ben (Franklin)

 On Seeking Alpha

"If all printers were determined not to print anything till they were sure it would offend nobody, there would be very little printed."  -Ben Franklin

As all eyes and ears will focus on Ben Bernanke this week, might I suggest we look to the words of a real genius and a quintessential American, Ben Franklin 1706-1790 (US author, diplomat, inventor, physicist, politician, printer and thinker). Though we may live in very different times and are separated by a couple hundred years or so, I encourage you to ask yourself if any of these quotes have lost any value in the age of high frequency trades and electronically traded funds. I will seek to apply his germane wisdom to the company Sirius XM, the stock (SIRI) and more generally to SIRI investors.

"An investment in knowledge always pays the best interest." -Ben Franklin

Sirius XM has had thousands of pages of historical, anecdotal and regulatory information written about it and available online to educate you. Its launch as a business over a decade ago was rightly seen as a threat to the mainstream terrestrial radio broadcasters and to the oversight and regulatory authority of the FCC. Many roadblocks designed to delay, derail, disassemble and destroy had to be negotiated, reconciled or circumvented in order to gain traction on the road to its current viability. Many requirements were imposed and many concessions were made along the way and it remains logical to expect that many more will come. Many daily opinions are...

Read More On Seeking Alpha:  http://seekingalpha.com/article/289759-sirius-investors-should-pay-attention-to-the-other-ben-franklin

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