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
    TJ, 17 Feb 2006 @ 3:50pm

    Re: Too many limitations

    If you'll reread my post you'll see I was talking about buying the satellite capability integrated into a new car, not some tacked-on FM modulator gizmo that doesn't integrate into the car, and would still have to be carried back and forth between the car and other locations to listen in more than one location. As for issues with buffering and dropouts that is information I got from people who do have the service, and I don't know if you or right or they are or if you have different units and are all right. Of course since you say it rarely cuts out still tells me that at times it still does. Based on what you are paying a year you appear to be paying close to twice the subscription price to have your two receivers, which confirms one of those "absurd assumptions" of mine.

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