Yesterday, XM Satellite Radio (NASDAQ:XMSR) announced that it has hit the 5 million mark. Along with the announcement earlier this month that Sirius (NASDAQ:SIRI) now has 2.1 million listeners, it's further proof that satellite radio is winning over the mainstream masses.
The exciting part for investors is that XM's incremental subscriber growth continues to accelerate despite a 30% price hike that went into effect back in April. Apparently, going from $9.95 to $12.95 is mere pocket change to folks craving XM's 150 channels of digital streams.
Back in July, XM raised its guidance for subscribers for 2005. It went from expecting a head count of 5.5 million members by the end of the year to 6 million radio fans. It is sticking to that target, which would imply that the next million subscribers will be coming on board over the next three months.
| Date | Milestone | Months Until Next Million |
|---|---|---|
| 10-27-03 | 1 million | 8 |
| 06-14-04 | 2 million | 6 |
| 12-27-04 | 3.1 million | 5 |
| 05-16-05 | 4 million | 4 |
| 09-27-05 | 5 million | 3 |
The fourth quarter will be a big one for both Sirius and XM. Sirius is looking to close out the year with 3 million subscribers. That suggests that each company is looking to reel in nearly a million new users. It also implies that Sirius is closing the gap in new sign-ups, though the holiday quarter was looking sharp for Sirius anyway, given its NFL contract and the arrival of Howard Stern come January.
Last week, XM announced that General Motors (NYSE:GM) had produced more than 3 million cars with factory-installed XM satellite receivers. Sirius and Ford (NYSE:F) continue to ramp up their factory-installed efforts. So don't let anyone tell you that this summer's employee-pricing promotions have hurt more than helped. Sure, Detroit is going to have a hard time moving its 2006 models to spoiled auto owners over the next few months, but XM and Sirius are the beneficiaries of a recent spike in bargain-priced car sales.
So here's to XM and its 5 million subscribers. Ten million eardrums can't be wrong ... though they can be impaired, so take it easy on those decibels.
Tune into some of these other related stories:
- David Gardner recently interviewed XM CEO Hugh Panero.
- Maybe traditional radio won't die without a fight.
- Talk shop with sharp Fools who know the sector well in the XM discussion board.
Longtime Fool contributor Rick Munarriz thinks it's cool that Sirius broadcasts The Motley Fool Radio Show four times over the weekend. He does not own shares in any of the companies mentioned in this story, though he is a satellite radio subscriber.He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
