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

To: i-node who wrote (2225)	2/17/2006 3:01:40 PM
From: pcstel	Read Replies (2) \| Respond to of 3386

I do have a difficult time understanding why Sirius hasn't been able to get its SACs under control; by now, one would think their scale of operations would have gotten them in the ballpark with XM's. Hmmmm, same business, same business model, same apporx. costs of equipment. Let me see if I can answer this one for you. CPGA is supposed to be the total costs of acquiring a new subscriber divided by the number of Gross Additions. XM counts "trial subscribers" as actual "subscribers". Which they are not, at least until they become "Self Pay Subscribers", since they are not included in the CHURN metrics when they don't become "self-pay". So the total number of Gross Additions that XM reports directly offsets the CPGA figures. The more Gross Adds you have, the lower your CPGA. Now, of course when that "trial subscriber" doen't become a self-pay subscriber. Management does not go back are restate the CPGA figures for subscribers that were never really subscribers. They then simply claim they were never subscribers and don't include them in the CHURN metrics. It is an optimum plan. Report the stuff that make the nubmers look better than they are, and don't report the stuff that will make the numbers look worse than they are. Maybe we can try this on our tax returns next year. We can claim that some of our income was simply trial income. It didn't really stick around, so it shouldn't really be counted as income in the first place?