During Thursday’s earnings call with investors, XM Satellite Radio Holdings Inc. said the company would have 10.3 million subscribers if they counted promotional subscribers when a new vehicle is manufactured.
“XM does not report promotional subscribers when a new vehicle is
manufactured but only counts it as a subscriber when the vehicle is
sold and when we have a paid subscription,” said CEO Nate Davis. “So investors often ask for
the number of XM-equipped vehicles that have been manufactured and
shipped to dealers but not included in our subscriber numbers. This is
the so-called parking lot subs number.”
The company said that automotive partners report that XM-equipped vehicles reached 1.255 million at the end of 2007.
“In essence then, if XM included these unsold vehicles in its subscriber
totals, then we would have a subscriber total of roughly 10.3 million,” said Davis.
XM earlier this week, CFO David Frear said that these so-called “parking lot subs” accounted for 11% of the company’s subscriber base. Sirius said it ended 2007 with 8,321,785 subscribers.
“…the cars that have yet to sell through are about 11% of the base at the
year end,” said Frear to investors on Tuesday. “It is up slightly from the third quarter and up from the
prior year end where I think it was about 9%.”
Sirius counts these “parking lot” subscribers because they get paid for them, and so they include them in their metrics.
Still, the 10.3 million number may not be true comparison, as XM may not get paid for all of the 1.255 million unsold vehicles. XM receives payment from automakers such as GM and Honda, but they do not from others like Toyota, Hyundai and Nissan. Still, the latter are still ramping up in their penetration rate, so the “true” number is likely substantial regardless.
Davis didn’t make this into an XM vs. Sirius moment though.
“This OEM growth story is true for both satellite radio providers,” the CEO added. “In
fact, with Sirius reporting 4.2 million gross additions in 2007 and XM
having 4.5 million gross additions on a comparable basis, each company
would have added the largest number of yearly gross additions in the
history of either company.”
[Transcripts via SeekingAlpha: , ]
Share This
Random Posts
