Sirius XM Radio, which completed its merger not even a year ago, has seen its subscription numbers fall for the first time since the companies first launched, separately, in 2001. According to the Wall Street Journal, a record 1.7 million subscribers jumped ship during 2009’s first quarter; during this same period, Sirius XM claims 1.3 million new subscribers.
Analysts said that most of those who canceled the service cited changes in the company’s programming as the reason. Following the merger, several stations that had been deemed redundant were dropped from the lineup — a fact that rankled listeners who lost favorite programs and DJs in November 2008. But those same analysts and company officials say the slumping economy hasn’t helped matters, forcing many to slash their personal spending. That has adversely impacted the automobile industry, and thus, Sirius XM, as several car companies have started installing the company’s receivers as a standard option.
All told, Sirius XM ended the first quarter with 18.6 million customers, down 404,000 from December. The company also posted a $236.6 million loss, or twice the loss reported in the same quarter of 2008. And Chrysler’s restructuring and an anticipated bankruptcy filing from General Motors isn’t going to turn the tide.
While the company’s stock took a decent hit in the wake of the news, some experts expected worse news from Sirius XM, because of outstanding merger-related cost cuts. Joseph Stauff tells the WSJ that by next year, he expects the company is “going to need the subscriber base to be at least stable.”
In response, Sirius XM CEO Mel Karmazin says he’ll be reviewing all of the company’s contracts, including those with on-air talent, to see where he could cut some fat, and that the firm will be beefing up efforts to market the service to consumers in the used car market. In February, when the New York Times reported the company was heading for bankruptcy, many theorized that meant marquee talent like Howard Stern and Martha Stewart could lose their high-price contracts.