>> It is like the old saying.. Statistics and numbers don't lie, but accountants and statisticians do.
As a CPA and one who has had maybe 24 hours of college and graduate statistics, I comprehend your point. But there has been no "lying" by XM. There has been a great deal of obfuscation by Sirius, but they *are* doing better than they were a few quarters ago.
Exactly how much does XMSR "pay" GM for the privilege of each install into a GM vehicle? This is a Subscriber Acquisition Cost and since it is the "major" XMSR SAC cost it should, but is not included in the SAC.
The amortization of the liability is $9.3 mln/quarter, last quarter, that would have amounted to about $22/net sub addition. XM does not include this figure in SACs (and as a CPA, I agree with their treatment), but if you choose to include it, you can easily do so yourself. Add $22 per sub to their SACs and you get $79. Still, you'll agree, not even in the same ballpark with SIRI's $200 plus numbers (likely to be worse for Q4, although the companies denies it).
XM does not want to account for the lame or unused installs because they shun that toward a hardware cost, nor does XM adequately represent the churn for these specific GM installs.
There is absolutely no truth to this assertion. XM has defined "churn" precisely as has been done in other subscriber-based industries, such as the cellphone industry. While Sirius has chosen not to disclose these figures yet, I think it is highly likely Sirius will handle them in precisely the same manner as XM once they do begin disclosing this information. Furthermore, each successive quarter, these figure become less and less important. While XM may have 400K subs in promotional periods, and only 60% of them will end up subscribing, we KNOW what that figure is with reasonable accuracy, *AND* the figure does not grow substantially from quarter to quarter.
It is very difficult to determine the specifics of the GM install and its significance on SAC. If you have concisely figured it out, please enlighten.
I believe I just did. You can add 9.3 mln/quarter to total SACs and get the net adjustment -- $22 for Q3. Likely to be about $12 or $13 for Q4. |
