Sirius XM Bleeds Customers, Blame the Programming.

By  |  Thursday, May 7, 2009 at 11:03 am

sirius-xm-mergerDespite the company’s best efforts to sugar coat it, Sirius XM is in trouble. The company shed just over 404,000 subscribers in the first quarter, as far as we can tell the first ever where the company combined or separate has done so.

Losses also widened to $236.6 million, more than double the $104.1 million loss a year earlier. Pro forma revenues clocked in at $587 million. The company did report a $108 million profit from operations, its second quarter of doing so.

The loss came as a surprise to Wall Street, which expected the company to continue adding subscribers on a much smaller loss. Miller Tabak & Co analyst David Joyce told CNBC that he believes subscriber loss will offset any gains from cost-cutting measures, a problem for the company.

We’ll give some credit to the company for reducing its costs, such as the subscriber acquisition costs, down to $61 from $82 a year earlier. However, the signficant loss of subscribers is very troubling.

Sirius XM is quick to blame the automobile industry’s woes for its problems in attracting customers. While yes, the auto industry slowdown is exacerbating the problem, it is not the cause. It’s the company itself.

For all intents and purposes this company is being horribly managed, especially in the programming department. We’ve already covered the hot mess that is the DSquared show, but there’s more. It’s as if the service has hired complete novices to program its channels.

I’ve watched the fan boards for awhile, and over and over again its the same story. Music on a channel that is either completely off format or just plain bad, or DJs who make the stations sound like FM.

That is the central problem for Sirius XM, not the automobile industry. Start running your programming department correctly, and you won’t have such a problem keeping people.


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13 Comments For This Post

  1. Keith Shaw Says:

    They have other problems too, like constantly updating equipment that requires users to purchase new gear. We recently bought a new car and wanted to transfer our old radio into the new car, and the mobile installer told us they didn’t have any of the old power adapters for the system, that we’d have to basically buy a new radio in order to get it installed in the new car. This was a reputable installer, not a scam, and the equipment we had was not that old. We were borderline on canceling the service anyway (the new vehicle has an AUX port that we could plug our ipod/iPhone in, as well as a 4-disc CD changer, so our musical needs were filled without having to pay a monthly fee for Sirius XM). That may be the downfall of the company, not just their programming.

  2. Vulpine Says:

    I agree that SXM is at fault. Whoever their program managers are, they’re really screwing things up! The only station that seems to be doing any good as far as I’m concerned is the Old-Time-Radio channel, featuring nothing but classic radio plays. It’d be nice if, since they combined libraries, they shifted to 16-hour or 7-day loops so you don’t hear the same program multiple times in the same day. A 16-hour loop that ran for 2 days would make it easy to hear something new every time you selected the channel.

    Add to this the fact that none of the channels outside of this seem to actually be following their labels means that people who used to enjoy a program, no longer have a program to enjoy. More than once I’ve read of specific shows that have changed so drastically they’ve driven the old fans away.

  3. Kevin Says:

    I don’t know why you’re blithely dismissing the impact of automotive sales falling 35%. At this point in the satellite game that’s where the large majority of new subs come from, and the huge decline in auto sales in way more than sufficient to ENTIRELY explain any net decline in subscribers. If the auto industry were healthy there’s be satellite tuners in close to 2 million new cars sold per quarter. As it is, the number is more like 1 million. So that is 1 million lost easy opportunities to pick up a subscriber just in the quarter.

    Not saying they don’t have other problems — I dunno, not currently a subscriber. But you can’t ignore what’s happening with vehicle sales.

  4. Louie Says:

    I’m a subscriber to sirius since ’05. The merger totally screwed the programming. Stations that overlapped needed to be dealt with, and it seems to me that they would remove the most enjoyable and replace it with a lesser quality station. The new country station was replaced with the xm new country station that had more annoying djs and less quality music as far as variety went, rarely moving off the top hits. The obscure classic rock genre station also suffered the same fate. I could write a thesis, so I’ll stop at that.

    The other issue is that after the merger, customer service became totaly inept, not understanding of the issues needing to be resolved, and there is no higher level to appeal to to attempt better resolution.

    Customer Service e-mail contacts are responded to with form sounding letters that in essence tell the customer “we are sorry you feel that way, but this is the best thing for you, so love it or leave it”.

    I don’t love it anymore, unless they turn around I’m leaving it when my subscription is over. They’re pissing off their customers. Some one should tell them that HD radio is free, people have other options.

  5. Stilgar Says:

    I guess I’m in the minority. I’m happier with Sirius/XM than I ever have been, and I’ve been a subscriber since 2005. If you’re looking for good radio, try checking out Tom Petty’s show Buried Treasure:

  6. drew Says:

    Kevin makes an interesting point, and IIRC, GM pushed XM a lot in their cars. I bought a GM Equinox in 2005 and it came with XM, and even with the merger, I still like it. With GM sales down so much, I am sure it is a big hit. I don’t know about other brands offering XM or Sirius with thier cars, but I assume other also did so.

    However, they are also loosing existing customers. At $9-$12 per month, you can see it as an area were people who are being pinched by the economy could cut back. I listen to XM all the time, but if things got bad job-wise, I could jetision XM and go back to local radio and live with that.

  7. mark Says:

    yeah all you see is the complainers, people who are happy with the service which is the vast majoprity usually stay quiet, im not going to though cause im also a shareholder, the service is great. if u cant find anything to listen to on satrad then go to fm and try to find something there. gl

  8. Glen Says:

    After the merger they offered less and wanted more money. Specifically it was now extra for internet access. Not a good time to be asking for more money from customers. The equipment was unreliable. I went through several stilettos. They kept freezing up and you could not perform a recovery on them. I have several friends with the same problem. And I’d like to second the notion that they kept the lesser quailty staions. The final straw was calling customer service and being read one script after another. None of which was helpfull. I really enjoyed the service for a while but they didn’t seem interested in keeping me as a subscriber so I obliged them.

  9. Since 2002 Says:

    I have been a VERY satisfied XM subscriber since 2002. I was cautiously optimistic with the merger and am comfortable with the changes that have taken place. While the format changed somewhat with some of my favorite stations, I can honestly say that I have never been happier with the service. I do not know of any other way at this point in time to listen, while commuting to work, to TONS of channels with a multitude of music and other entertainment choices with very few commercials overall. Sure, I could use an iPod, but then it’s only what I’ve decided to play. It’s more fun to have so many options and hear something new. Try doing a long drive for a week with just the FM radio again and maybe there would be a few less complainers . . . but as Friedrich Nietzsche stated, “It is impossible to suffer without making someone pay for it; every complaint already contains revenge.” The complainers need to either move on or suck it up. Give it a chance. It’s better than AM-FM will ever be . . . and less work and repetition than using your own CD or MP3 player.

  10. Patrick Says:

    Looking for help…. I have a 2008 Chevy Malibu with XM programming. I decided to pass on keeping the XM subscription because I was planning on bringing my Sirius over from my old car (Sirius lifetime contract since 2006). Is it possible to program my Sirius into my car without having to use my old Sirius equipment? Thanks!

  11. Frank Says:

    I got XM as a Christmas gift last year and I am not happy. The internet program guide is regularly messed up and navigating the website can be very frustrating. Unless they can get their act together, I will not renew my subscription.

  12. Sal D'Agostino Says:

    I completely agree. I got it to listen to jazz. They lump all jazz together on one station, while giving rock about 150 subdivisions. A jazz fan doesn’t want to listen to Dixieland followed by John Coltrane followed by Diana Krall anymore than a rocker wants to hear Olivia Newton John followed by NWA followed by Pink Floyd. Get smart over there!

  13. Used Mercedes E320 Says:

    Low cost and high quality affordable cars online can only be purchased from company , the 24/7 customer support is an added feature. All cars are caerfully insoected and graded 3-4 in auctions. The prices are not burden on pocket and cars are well maintained.

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