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

To: TimF who wrote (2595)	6/23/2006 2:02:58 PM
From: i-node	Respond to of 3386

>>> How high could a cost go and still in your opinion be considered totally immaterial? Well, XM will lose a half billion or more this year, so if you figure 5M would increase their net loss by 1%, 5M/year, that may be in the ballpark of some limit on materiality. Sirius will lose twice that, so for them, 10M would seem reasonable to me as a limit. But it is important to keep in mind that XM & SIRI are engaged in tough negotiations with RIAA right now where much larger amounts are at stake. It would not do for them to lay down on this issue without a fight. Within the next five years, XM's payments to RIAA for broadcast rights will be topping 100M/year -- even at today's rates. And RIAA is wanting MORE, PLUS more money for these MP3/Receviers. So, when you look at the materiality of the expenditure you probably want to consider also just how much money an additional 1-2% on top of the current payment could be in a multi-year contract. XM has taken extra measures to comply with the law as it stands. The real concern is this nonsense where RIAA has gone to line up legislators to change the law, after RIAA got the language it wanted only a little more than a decade ago. How can technology progress when the law they're engineering the stuff under is changing every few years?