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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR) -- Ignore unavailable to you. Want to Upgrade?

To: DaveMG who wrote (2196)	2/17/2006 10:49:33 AM
From: i-node	Read Replies (3) \| Respond to of 3386

It would make more sense, it seems to me to look at churn from those who do sign up and activate, and to then assume that if Xm is posting say 6 million subs at the end of 2005, that some large number ie 500k You are correct. And you don't have to assume it -- XM discloses the number who are in "trial periods" at the end of each quarter. The argument that XM's disclosure is inadequate is wrong. And it is totally consistent with the way other industries report promotional subscribers (Sirius is a different matter). The entire point of the churn metric is to tell you at what rate customers are leaving the service. There is no other reason for it. If you include in that metric those people who (a) received, but did not ask for, the service, and (b) received, but did not pay for the service, and (c) after evaluating this period, chose not to activate, then your churn metric is, in no way, indicative of the rate at which new, paying customers leave. If one needs these additional data, XM presents it. A so-called "blended" or "fully loaded" churn metric is totally, absolutely, meaningless for its intended purpose, i.e., measuring the rate at which customers leave the service; these people were never "customers" in that sense. So, the question is, "Why count them as customers, if they're not customers?". There is a good reason for that. If you don't count them as customers, then an entirely different set of metrics is all screwed up -- the calculation for ARPU is destroyed, because even though these promotional subscribers are not "customers", XM is being paid for them (by the auto manufacturer). ARPU is revenue divided by subscribers. If you include the revenue but not the subscribers, you get an inflated ARPU number. XM handles this in the best possible way -- it computes churn in the way that it provides the most meaningful data; it computes APRU in the way that it provides the most meaningful data; then it discloses sufficient information to allow anyone who wants to to calculate either figure differently. The only thing they could do differently would be to calculate it for you, which would mean providing TWO figures for each, and I think everyone would agree that would simply add confusion.

To: DaveMG who wrote (2196)	2/17/2006 10:54:09 AM
From: sixty2nds	Read Replies (1) \| Respond to of 3386

09:15 XMSR XM Satellite downgraded to Hold from Buy at Sanders Morris (23.98 )

To: DaveMG who wrote (2196)	2/17/2006 1:22:52 PM
From: pcstel	Read Replies (1) \| Respond to of 3386

It would make more sense, it seems to me to look at churn from those who do sign up and activate, and to then assume that if Xm is posting say 6 million subs at the end of 2005, that some large number ie 500k, will never activate, but all that does is lower the sub numbers by some relatively constant number over time, so that the real sub number is always 500k below what's stated. And Wall Street would be non too impressed with lower sub numbers. This is really the reason that XM doesn't provide what I would call "Industry standard" Metrics. Because if they did, I don't think the capital markets, nor the investment community would be to interested.