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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)
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To: pcstel who wrote (2223)2/17/2006 2:42:11 PM
From: DaveMG  Read Replies (1) of 3386
 
How bout looking at it in this simplistic way, without getting into the SIRI/XM squabble. I'm not sure that how they count all this is all that important as long as in the end we know how many subs there are, what op expenses are, what cap ex is etc. XM spent about 1.1 billion and SIRI 880 million last year on operational expenses? I suppose you're argument is that the confusion about these metrics means it's impossible to get a handle on where expenses will be in a few years. My suspicion is that total sub acquisition costs will stabilize and become less significant as time goes on because new subs will represent a smaller and smaller % of total revenues. I would expect programming costs however to continue to rise,but by how much is anybody's guess and this was the crux of the Board's disagreemment.

Alternative delivery methods will cost money too, wireless data plans are not cheap at this point, and the type of all you can eat data you're referring towon't be either.. Somehow the pipe and content providers will still have to be paid.I'm a sat radio user and am extremely happy with what I get for the money so I'm somewhat skeptical of this argument although there's no question that the proliferation of delivery platforms will fragment the marketplace. I can imagine wanting more than one type of "access" and being willing to pay for it.
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