Have You Noticed It's Costly To Run A Bunch Of Satellites? XM Has...

from the ain't-so-easy dept

From the very beginning of satellite radio, I was skeptical of its potential. While I admit I was wrong about the number of people it would appeal to, my bigger issue was with the cost structure of the business. Launching and maintaining satellite is extremely expensive. Just ask anyone who worked on Iridium or Teledesic. Even if you can sign up a lot of users, the capital costs are tremendous. If the costs of getting those subscribers is high, then it's a definite recipe for trouble. So far, Sirius and XM have been able to keep kicking, mainly through a ton of investment money and the promise of future potential profits -- stacked up against continued losses. It looks like a few are finally doing the math on all of this and realizing that the satellite radio business, as much as some people like it, may not be sustainable. XM posted wider than expected losses today, blaming higher than expected customer acquisition fees -- suggesting that, for all the good press, not as many people as expected have been rushing to sign up. Also, one of the company's directors resigned, citing a "crisis on the horizon," which is anything but inspiring.

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  1. identicon
    Namtaru, 16 Feb 2006 @ 8:33pm

    Re: Too many limitations

    If they wanted you to pay $200 for Sirius then you were getting wuoted way too high. I pay $210 a year for two receivers. Everytime you add another receiver you get a discount on the price, it doesn't go up.
    Sirius DOES have buffering capabilities, I drive through downtown Detroit every dat under bridges and deep in the city around all the tall buildings, rarely does it ever cut out at all.
    Also Sirius has a portable player called the S50 that comes with an FM modulator for your car and a full color display.
    The only limitation is people not doing the research on satellite radio before they make absurd assumptions.

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