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

To: DaveMG who wrote (2229)	2/17/2006 4:08:45 PM
From: i-node	Read Replies (1) \| Respond to of 3386

really think you're splitting hairs and this issue is not going to determine the failure or success of the model, or investor appetite for the stock.. They said on the call 54% become paying subs. Whether or not they are counted as subs when they're on the trial period does not affect the long term trend in any way whatsoever. I made my own simplistic spreadsheet more than 2 yrs ago and checked it yesterday. I had modeled 5.5 million subs at year end 05, annual revenues of 550 million,very close to what actually happened. Where I got it wrong was that I assumed 750 million in expenses. I will now start to model 1 billion going forward which pushes cashflow breakeven out a year or so.It doesn't seem that hard to model this stuff. Exactly. And I agree -- when you have all these fixed costs, it comes down to hitting what the unit variable costs are to get a model that works. In your case, you up the fixed costs, it takes more subs to get to breakeven, but when you do, its all good. The one thing is that we don't know what RIAA is going to do. But I don't think their case is going to be that strong, apparently, it will be decided in arbitration, and given that they're PAYING terrestrial radio to play music, it would seem they will have a difficult case to make in getting much more out of satrad.

To: DaveMG who wrote (2229)	2/17/2006 5:26:15 PM
From: pcstel	Respond to of 3386

As I said, the 2 main questions are how many subs will they achieve and at what uptake rate, and where are costs going? You're not saying anything about these questions, though they are speculative in nature. They are, speculative in nature, but the real question you should be asking yourself is.. How many customers will they KEEP! A new subscriber is simply an expense at this juncture. With an associated cost of capital. They increase Royality payments, Customer Care costs, etc. The one's that you are making money off of are the ones that you acquired 2 years ago. Those are the one's that have returned, or are darn close to it, returning the CPGA and associated costs back to the company. Most other subscriber models don't have to worry too much about this, because they are guaranteed to get their CPGA back, and receive 4X the ARPU. Wall ST analysts don't like it when something happens outside their models which is why they're now downgrading the stock, Because their models should be darn spot on. When they are not, they know something is wrong with their model, which means that the data that they use in their model must me wrong. Even though management says it is correct. I remeber in 1998 when QCOM's entire enterprise value was 3 billion and NOK and ERICY were spending their time bashing the company and claiming they invented CDMA, when they should have just bought them up. QC now earns almost that much money every year.. Ahhh!! I call those the good ole' days. Actually, it was closer to 4 Billion and 1X Sales. Back in the days when the shareholder meetings were in the atrium of Building Q on Lusk. ferspag.... CDMA market segmentation by: PCSTEL >>>10/19/98<<< 10:57 am Msg: 9348 of 584986 finance.messages.yahoo.com Retired off of that one. And so it goes, PCSTEL