XM RADIO SUFFERS START-UP WOES

Citing a "crisis on the horizon" if the company does not cut its costs and losses in short order, Pierce Roberts Jr., a board member of XM Satellite Radio, has resigned.  XM recently cut a deal with media superstar Oprah Winfrey, and spared no expense in a marketing blitz during the lead-up to Howard Stern's debut on rival satellite broadcaster Sirius. 

Washington Post story here.

Comments

[Josh]

It would also be interesting to add that the "Rock" and "Roll" Satellites have an estimated life span of 5 years, thats 5 less than initially speculated. With these radio companies barely breaking even I don't see how on earth they could afford a couple billion dollar satellites in 2008.

[mewsical]

By the time Eliot Spitzer and the FCC are through with 'legit' radio and the payola problem, XM and Sirius can probably acquire a bunch of stations for chump change and it'd be full circle back to the old days of FM radio, uncontrolled by consultants and big broadcasting conglomerates! And we could listen for free!

[David]

I am always amazed at the hype that is created to support investments in businesses that do not work. AOL went bankrupt 3 times before creating positive cash flow, Internet, Telco, Biotech all do the same thing.

These are not companies they are a way to trade momentum. The current business model of SAT-radio does not work. The Customer acquisition costs are too high and the churn does not allow the company to recover even the acquisition cost.

After a couple of bankruptcies the things may actually work.