Sirius XM Loses 400,000 Q1 Subscribers - Thanks iPhone / iPod!


For subscription services, one of the core business measurements is new / lost subscribers. Read the quarterly earnings transcripts for companies like Comcast and you will realize how much attention is paid to subscription and revenue per subscription metrics.

This week, Sirius XM (SIRI) reported very poor numbers and saw their stock fall from $0.54 to $0.42:

The satellite radio monopolist said it lost 400,000 net subscribers during Q1, finishing the quarter with 18.6 million subs.

Retail subscribers -- those who sign up for Sirius on their own, not by buying a new car -- were the biggest defectors, at 370,000 net sub losses, down from 49,000 net sub losses a year ago.

According to BusinessInsider.com, Sirius blamed their struggles on the auto industry. Certainly a weak auto market - and economy - will negatively impact Sirius XM...

But isn't the real issue that Sirius XM simply doesn't provide as much value as it used to? iPods and iPhones have effectively captured the majority of satellite radio's initial value: on-demand music and content. Now, between massive music libraries, podcasts, Pandora and countless other ways to access content you want - there really is no reason to pay a subscription price for Sirius.

In fact, the only reason to subscribe is if you are particularly drawn to specific personality (like Howard Stern).... and even that is eroding. For instance, XM used to have rights to all MLB games with MLB Home Plate. Now, for a one-time $9.99 fee, you can get an improved version for your iPhone or iPod Touch - complete with box scores, video and other customizations.

And that's just the content piece. Neither Sirius nor XM ever understood form factor and portabilitiy... and obviously Apple has mastered that. So while Sirius wants to blame Detroit and a struggling indsutry for their woes - they should really credit a technology company for beating them in both device and content.