satellite radio stations

[Illuminati]

what do you guys think about satellite radio? do you think it has the potential to take over and make am/fm radio obsolete? i ask, because i am have been doing some reasearch and am thinking about investing in the two main competing companies (XM Satellite and Sirrus.)
Sirrus just recently signed a deal with howard stern, and stern has a reported 40+ million advid listeners a day. i think it is an 8year, $11mil deal.vvSatellite just signed a deal to air MLB games next season. both companies charge for the satellite reception, which is roughly $12. both companies are still relaitvely new, and their stocks are still still cheap. i think XM Satellite (XMSR) is at $30 and Sirrus (SIRI) is $4.
any thoughts?

 

[bran987]

you should do some research on this there have been a lot of great articles written lately
like I said my brother asked me the same thing a few months ago and I said that I thought they were both good long term holds and I really don't like the stock market.

and btw howard's deal was 5 years for $100 million/year

XM just signed the MLB up for $650 million

it's a big business already, don't be fooled by a $4 stock price versus $30 both companies are valued at $7 billion which is putting them in mid cap status!

 

[Illuminati]

you should do some research on this there have been a lot of great articles written lately
like I said my brother asked me the same thing a few months ago and I said that I thought they were both good long term holds and I really don't like the stock market.

and btw howard's deal was 5 years for $100 million/year

XM just signed the MLB up for $650 million

it's a big business already, don't be fooled by a $4 stock price versus $30 both companies are valued at $7 billion which is putting them in mid cap status!

either way, with howard stern, the potential listeners that he could, and would rack in to their services would no doubt raise the price of the stock in the long run. granted right now, their cash flow sheet is going to show that they are operating at a loss (XM Satellite $710mil debt, and Sirrius $426mil.) but they are new companies, and they are just getting past their initial phase of purchasing "assets."

i am seriously considering purchasing stock in both companies because i can see a big future for satellite radio. these companies can reach far more of a listening audience when compared to a traditional radio station (be it AM or FM) merely because of the way that the information is going to be transmitted.

both companies are also aggressively going after the auto industry to install their satellite receivers in newer model vehicles. XM Sat. is currently in 103 models of cars...GM owns 5% of XM and is going to put their receivers in 90% of their vehicles. Also, Honda owns 8%. Sirrius is going to be in 50 DaimlerChrysler models, Ford has committed 20 models. It has been shown that 57% of the people who purchase a vehicle equipped with a satellite receiver sign up for the service. with roughly 16million new vehicles sold a year, that would be 9.12million new customers, or approximately $100mil per month in sales. or if you take that there are 200 million vehicles on the road. it just 50% go with the satellite radio, that would be $1.2bil a month is subscription. and that is just the auto industry.

 

[bran987]

I agree with ya bud
just realize *some* of that has already been priced in, but I agree they are great long term holds
Just like my nanotechnology stocks

 

[bran987]

http://biz.yahoo.com/bizwk/041029/b3907061mz011_1.html

 

[Synpax]

They look like great stocks - to go short on.

Both of them have been bleeding money for years. Everyone either listens to local radio for free or if their interests are too niche they have CDs. Local radio is going to be moving to digital audio with better than CD quality and all the smart-tag stuff shortly - and no monthly charge.

Satellite TV's main selling point is that it is cheaper than cable. That same edge isn't going to apply in this market.

 

[bran987]

They look like great stocks - to go short on.

Both of them have been bleeding money for years. Everyone either listens to local radio for free or if their interests are too niche they have CDs. Local radio is going to be moving to digital audio with better than CD quality and all the smart-tag stuff shortly - and no monthly charge.

Satellite TV's main selling point is that it is cheaper than cable. That same edge isn't going to apply in this market.

CD quality doesn't matter when the music is awful and the commercials run 35 minutes an hour
people in america hate what's on free radio now

 

[Illuminati]

I agree with ya bud
just realize *some* of that has already been priced in, but I agree they are great long term holds
Just like my nanotechnology stocks

why do you believe that nanotechnology stock is a good buy and hold stock?

 

[MacGyver]

Local radio is going to be moving to digital audio with better than CD quality and all the smart-tag stuff shortly - and no monthly charge.

That is a really good point, I am addicted to Rhapsody. But i still think Sirius has potential.

 

[Illuminati]

CD quality doesn't matter when the music is awful and the commercials run 35 minutes an hour
people in america hate what's on free radio now

they still wont be able to reach any where near the audience that a satellite radio station would due to how the signal is sent.