Tuesday, October 14, 2008

Sirius XM chief: Yes, we will be profitable

Mel Karmazin is optimistic and bullish on satellite radio. He talks the talk and walks the walk, and believes that his combined company will be stronger and more profitable in the long run. Mel is building up his size and he believes in content and when he does the numbers he still sees growth. "Today, Sirius XM has 19.5 million subscribers, which Karmazin said makes it the second-biggest subscriber base in the cable-satellite space behind Comcast, and is slated to keep growing. " Despite a poor economy, people are still buying cars and he is putting the Sirius option in most of them. With free months to taste the content, he believes he will convert at least half into long term customers. Along with Howard Stern and Martha Stewart, he also has NFL, MLB and much more. Will this be enough to keep people in their cars listening, I'm not sure, but Mel says "that between 94 percent and 96 percent of Sirius XM's revenue comes from monthly subscription fees, not advertising." So if the ad community sees measurable results, the profit upside can be strong.

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