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

To: pcstel who wrote (2282)	2/26/2006 12:53:49 PM
From: i-node	Read Replies (1) \| Respond to of 3386

And I have stated that I have at least a decade more experience in evaluating "subscriber models", I don't doubt that; I don't think I had invested in a business with a subscriber model prior to XM and Sirius. You may have extensive knowledge of subscriber models, but you seem to lack a basic understanding managerial accounting. Perhaps a lot of your confusion stems from the fact that you view all "subscriber models" as alike, in a one-size-fits-all manner. They aren't, and they are different. You have repeatedly said, "CPGA too high, ARPU too low". My response is "variable unit costs plenty low, fixed costs in control". If you get enough subscribers, and they are sticking around long enough, you will make money and plenty of it. XM's paying subscribers are churning at 1.5%. The fact that you get a higher churn rate if you lump in nonpaying promotional subscribers is of little interest. Of much greater concern is the "take rate" amongst these customers. If only 10% are becoming paying subscribers, we have a problem. Perhaps the reason you cannot see the value in XM's business model is that you are working with artificially inflated churn figures. For the heck of it, how about applying your substantial experience in evaluating subscriber models. Given what you know about XM, how many subscribers do you think it takes to get to net income breakeven? Do you think it can never happen? If so, could you present a few numbers to back up your position? There never has been any "cell phone company" that is required, or has filed a 10K that has ever employed the use of those in promotional periods as subscribers, yet failed to count these Promotional syscribers in the CHURN metrics. Never is a very long time, and I disagree because I found a couple at one point. I haven't looked but perhaps I will. I think it is not an important point, and if you truly want to make your case here you should be able to tell those on this thread exactly what is wrong with XM's model. Not generally, but with specifics pertinent to XM.