XM Satellite Gets $450 Million… Sorta
from the not-bad dept
If you read Techdirt enough, you’ll know I’ve never been a huge fan of the various satellite radio systems. I just don’t think the market is ever going to be big enough to justify the costs. In the end, I still think they’ll meet a similar fate to Iridium. Over the summer, when both of the big players in the space announced worse than expected adoption, and the fact that they needed many millions in cash in order to reach breakeven, I thought the end of the satellite radio craze might come quickly. However, despite my prediction that it would never happen, at least one of the two players has done the impossible. XM Satellite Radio has announced that they’ve raised $450 million which they claim will bring them to profitability. $450? In this market with an unproven technology and not many customers? Who would be insane enough to give them $450 million? That’s where the details become more interesting. It’s not really $450 million. $250 million of that comes from GM saying that they’ll “defer” payments that XM owes them for installing all those XM radios in GM cars. Wait a second… XM is paying GM to put these radios in cars? And they’re announcing a big win because GM is deferring those payments? Ok. I stand by my prediction that this company is going nowhere… just not as fast as I had expected.
