Absolutely.
Just like anything else, the more you grow, the tougher it is to maintain the growth rate. But presumably, the cost to acquire a subscriber will have dropped radically by then, as well -- cheaper equipment, minimal subsidies, etc. Churn isn't a problem if you don't pay much for the sub to begin with and as long as there is a steady stream of new guys coming in.
XM *HAS* done some things to mitigate it going forward. The data services, for example, which are just getting started (20K subs at an ARPU of $34). Other services, such as Navtraffic, integrated weather systems, etc., and ad revenue, all provide a boost to make it all worthwhile.
The ad revenue, in particular, is being overlooked -- but when you get 10M or 20M subs, it becomes significant if you're getting half the revenue off of the Oprah channel (or Howard channel). |
