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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)
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To: DaveMG who wrote (2232)2/17/2006 4:20:22 PM
From: i-node  Read Replies (3) of 3386
 
But what about churn, is it 18%/yr. That would be a big problem because as the sub base grows that number would become very big.

The biggest problem these companies have, IMO, is keeping churn under control, once they get to making money. REAL churn, though -- paying subs leaving. And that is running 1.5% now. The more your sub base grows, the more it takes just to maintain the same level of paying subscribers each month. So, I agree -- it is a lot. At 10M subs, they have to add 150K/month just to stay even.

But a certain amount of the churn is people trading cars, etc., who don't re-up immediately or whatever. But long term, this does become an issue -- but the growth is going to have to drop a lot before it becomes a big problem.

Ultimately, I would think a more-or-less equillibrium will be reached, at which time XM will become Dell.
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