SIRIUS Satellite Radio
Stock Report
By: Matt DeSantis and Jordan Eimer
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Proposed % of Portolio
# of Shares
52 week High
52 week Low
Current Price
0%
$9.43
$2.01
$5.06
P/E (TTM)
P/E Leading
EPS Leading
P/B (MRQ)
P/S (TTM)
Beta
N/A
N/A
-0.58
6.36
93.08
4.561
Business Summary
Sirius is currently a leading provider of satellite radio in the United States.
Presently they offer 120 channels, 65 of which are commercial free music, 55 are sports,
news, talk, entertainment, traffic and weather programming. The 65 commercial free
music channels are principally produced at their national broadcast studio in New York
City, and have a wide range of selections “covering virtually every genre of music.” The
non-music channels have programming developed by CNN, FOX news, ESPN, NPR,
The Weather Channel, and traffic reports for 20 of America’s top markets. They are also
the leader in providing live satellite radio of live sports programming. This includes live
play-by-play coverage of all NFL games, NBA games, college basketball and football
games, and will broadcast all the games of the NCAA Division I men’s basketball
tournament through 2007. They have also been given the exclusive rights to broadcast
NHL games, all NASCAR Nextel Cup Series, Busch Series, and NASCAR Craftsman
Truck Series races through 2013. Due to the NHL lockout for the 2004-2005 season,
SIRIUS has been given the rights for a year extension on their broadcast rights and
marketing benefits.
Programming and Products
Although XM Satellite Radio currently has more subscribers than Sirius, Sirius
has been actively obtaining exclusive rights for their products to be installed in new
vehicles being produced. Currently SIRIUS radios are being offered as a factory or
dealer installed option in over 80 different car models. This includes exclusive
agreements to install radios in Chrysler, Dodge, Jeep, Mercedes, Ford, Lincoln, Mercury,
Volvo, Mazda, Jaguar, Land Rover, Mitsubishi, BMW, MINI, and Freightliner and
Sterling heavy trucks. SIRIUS also has relationships with Nissan, Infiniti, Toyota,
Lexus, Scion, Volkswagen, and Audi to offer radios installed. In addition to new cars,
SIRIUS is also offered to renters of Hertz vehicles at 53 different airport locations.
The individual radios are also sold at retail stores nationwide. They currently have
various brands of their radios at more than 25,000 retail locations including Best Buy,
Circuit City, Wal-Mart, Radio Shack, Crutchfield, Office Depot, Sears, Target, and DISH
Network outlets. They are also available at heavy truck dealers and truck stops
nationwide.
Each of the 65 music channels offered by SIRIUS are programmed and hosted by a
team of experts in their field, which includes musical performers and other “unique”
personalities. In 2004 they mainly focused on creating new music channels and
expanding their offerings of sports and entertainment. Some of the newly added channels
are the
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Elvis Radio, dedicated to the music of Elvis Presley and broadcasted from
Graceland
Shade 45, an uncensored hip hop channel that was created by Eminem, Shady
Records, Interscope Records, and SIRIUS, that features performances and
interviews with Eminem, 50 Cent, and others
SIRIUS Faction, a new music station created for action sports enthusiasts,
features programs by Lance Armstrong, Tony Hawk, Kelly Slater and Bam
Margera
Underground Garage, a rock channel produced by Little Steven Van Zandt
Maxim Radio, a channel co-produced with Maxim Magazine, features a mix of
entertainment, contests, comedy, sports and music
SIRIUS NFL Radio, an around the clock channel of the National Football League
The breakdown of the 65 original music channel genres and the 58
sports, entertainment, news, and traffic stations is the following:
Traffic
9%
Pop
11%
Rock
14%
Entertainment
20%
Country
5%
Hip Hop
3%
R&B
4%
News
11%
Sports
7%
Dance
5%
Latin
4%
Jazz
5%
Classical
2%
Research and Development
Currently SIRIUS is developing “various ancillary services” that they are
expecting to offer subscribers in the future. (10-K) These services include delivering
traffic data to vehicles with navigation systems, sports scores, weather data, and other
functions. They are also developing a limited number of video channels that will be
designed and programmed for rear-seat video systems. These services are being
developed with a few different third party corporations.
Obviously they are also recruiting other popular shows to possibly lure to
SIRIUS, and continue to improve their existing shows.
Recent News
Hot Stocks to Watch! April 26, 2005
WESTON, FL, Apr 26, 2005 -- Wall Street News Alert's "stocks to watch" this morning
are: RV Wireless, Inc. ( OTC:RVWS), Lucent Technologies ( NYSE:LU), YAHOO! INC
( NASDAQ:YHOO) and SIRIUS Satellite Radio ( NASDAQ:SIRI). Stocks showing
interesting activity yesterday at the close of the regular trading day were: Lucent
Technologies ( NYSE:LU) up 0.7% on 26.5 million shares traded, YAHOO! INC (
NASDAQ:YHOO) up 1.7% on 23.7 million shares traded and SIRIUS Satellite Radio
( NASDAQ:SIRI) up 0.7% on 23.5 million shares traded.
–Market Wire
Sirius Launches Martha Stewart Channel
Apr 21, 2005 -- Sirius Satellite Radio signed an exclusive four-year agreement with
Martha Stewart Living Omnimedia Inc. under which Sirius will launch a Martha
Steward-branded channel named Martha Stewart Living Radio. The channel will carry
original programming specifically designed for women listeners and their families 24
hours a day, seven days a week. The content will focus on topics such as cooking,
entertaining, gardening, decorating, holidays and collection. Sirius said the channel
would launch later this year but did not offer specific details. Financial terms of the
agreement were not disclosed.
Phillips Business Information
SIRIUS Satellite Radio's Programming Receives Top Honors From Three Major
Magazines
NEW YORK, April 15, 2005 -- SIRIUS Satellite Radio ( NASDAQ:SIRI) today
announced that it has been selected as having the best programming in satellite radio by
three top-tier publications: Men's Fitness, New York and Cargo. In the May issue of
Men's Fitness, SIRIUS was selected as the overall winner in a head-to-head competition
and proclaimed "the shining star" in satellite radio. SIRIUS was also named the leader in
four key categories including hardware selection, exclusive sports coverage, big-name
talent and programming. For the programming category in satellite radio, Men's Fitness
proclaimed, "SIRIUS is the hands-down winner, with a better mix of music, talk, and
sports." In an article in New York's April 11 issue entitled, "The Well-Wired Home," the
magazine advised, "Most of you will want to choose SIRIUS ... the programming is
superior." "SIRIUS is dedicated to delivering the best programming in satellite radio,
and the recent reviews by these highly respected magazines are very gratifying," said
Scott Greenstein, SIRIUS President of Entertainment and Sports. "We believe that
creative and innovative programming is what sets SIRIUS apart from the competition,
and we will continue to bring the best music, news, information, sports, talk and
entertainment to our growing number of listeners across the country." In addition, Cargo
Magazine compared the satellite radio providers in its May issue and gave SIRIUS an
"A" for content in its report card of satellite services -- the only "A" given in the "Final
Grades." Cargo wrote, "Music lovers will appreciate the huge diversity on the dial. Extra
credit for signing high-profile contracts with the NFL, Eminem, and Howard Stern, thus
ensuring that fans will have exactly what they're looking for."
-PR Newswire
Industry Analysis (Primary Competitors)
Satellite radio is a relatively new business, and is highly technology reliant and
requires large initial sums of money to enter the market. Currently, there are only two
main competitors in this business, XM Satellite Radio Inc. and Sirius Satellite Radio.
They are both FCC registered, and unlike public radio stations, there are no censorship
issues and no commercials because their broadcasts are paid for by customers.
Content is king, and it's the reason most people buy satellite radio: to find music
and news they can't get on their regular radios. And while both radios have 100 stations,
many of them overlap. So it may be the few unique stations that are the deal breaker for
many subscriber’s decision to purchase.
www.music-sites.net:
SIRIUS
Have you ever taken a car trip and driven yourself crazy finding the public radio
stations along the route? For National Public Radio and Public Radio International fans,
SIRIUS has an exclusive deal with these two public radio entities. Get two channels of
NPR's talk shows and news, plus PRI's talk and entertainment shows from coast to coast.
No more flipping through stations as you drive from city to city, and straining to hear
over the static of low-powered local stations.
This one is huge. For you sport-heads, you can catch 40 games from the NBA and
NHL each week. And starting in August, SIRIUS will be the exclusive satellite radio
broadcaster of the NFL. Each broadcast originates with the home team's announcers, so
sometimes you'll hear your home team, or you can hear what the other guys are saying
about them during away games. With the exception of live NASCAR, XM doesn't offer
any live sporting events. Check the online schedule for teams and times.
If you're looking for partisan political talk, both stations carry ABC Radio, but
you get commercials, and typically only conservative talkers. But if you want left-wing
radio, check out SIRIUS Left, the liberal talk channel. There's also SIRIUS Right for
right-wing listeners. Both SIRIUS and XM now carry Air America, the new liberal
talkshow. However, XM has replaced Janeane Garofalo's "Majority Report" with the
Alan Colme¹s show from 9pm to midnight. This can be a plus or minus, depending on
your feelings toward Garofalo.
For Latin American listeners, SIRIUS carries BBC Mundo (BBC World in
Spanish), Radio Deportivo, as well as three other Spanish-language news stations and
two music channels. XM has CNN en Espanol, and five Latin music channels.
On the downside, SIRIUS actually has 103 streams, but they take up seven of
them with three regional and one national feed of The Weather Channel (XM just carries
the national), plus three "live sports only" streams that only carry live sports broadcasts at
game time. So you really only get 94 "twenty-four seven" channels.
XM
For NEW audio theater fans, channel 163 plays audio-books and radio drama
from the US, Canada, and the UK. Both stations offer Old-Time Radio channels, but if
you're into the new stuff, or love audio-books, XM is the best choice.
Comedy fans rejoice: XM has three comedy channels -- straight-ahead comedy,
family (i.e. clean) comedy, and "radio crazies" comedy DJs. SIRIUS only has one
comedy station.
Are you a fan of international music? While both radios offer World Music,
Reggae, and New Age, only XM has music from Africa with Ngoma. Whether you like
drum music from Babatunde Olatunji or Juju music from southern Africa, Ngoma is your
channel. Unfortunately, neither radio offers a Celtic music channel.
For other special-interest talk stations, there's The Power (African-American),
Babble On ("young & sassy talk"), Ask (experts and advice), and Family Talk (Christian
talk). Like SIRIUS, XM also carries Air America, the new liberal talk radio station.
Public FM Radio
The only 2 real advantages over the satellite radio new comers is public radio’s
ability to offer a free service. Additionally, they offer local news and weather
broadcasting.
SWOT Analysis
Strenghs
Sirius has exclusive rights to 16 automobile manufacture’s and formal agreements
with 7 others, whereas XM Satellite Radio only has the automobiles produced under the
General Motors name. This could prove to be quite advantageous as subscribers grow in
number and the satellite radios become more commonplace. Furthermore, specialty
programming, is one of the most important factors when choosing between XM and
Sirius. Sirius recently signed a deal that gives them exclusive (satellite radio) rights to
NFL, NBA, and NHL broadcasts. This alone could be a decisive factor that gives them
the edge over XM, who only has MLB.
Weaknesses
Sirius’ weakness is their lack of advertising and inability to draw positive cash
flows since entering the business. They are still struggling to attract and keep new
customers and build strong following of faithful customers. This isn’t any different than
XM, although XM does have more subscribers.
Opportunities
Sirius can and has been taking actions to utilize opportunities to shut out the
competition. Exclusive agreements with specific programming like sports, Howard
Stern, and Martha Stewart, will continue to give them a definitive edge over XM.
Specialty programming and the commercial-free, extremely wide variety of streams will
set them apart from public broadcasts. In addition, holding on to their current car deals
and seeking even more before the competition does will give them an advantage. It is
also important for the company to constantly be in the pursuit of new and improved
technologies.
Threats
The largest threat is that of new and existing competitors. XM already has over
twice as many subscribers. Market risk is always a threat, but even more so in Sirius’
case because satellite radio is currently a luxury item. International expansion may also
become an issue. If XM receives exclusive license to new and popular specialty stations,
this would create problems for Sirius.
Utilizing Strengths and Opportunities to Overcome Weaknesses and Threats
By exercising its exclusive agreements and contracts with auto makers and adding
new specialty channels, Sirius may overcome its competitor by attracting more customers
and eventually take over the weaker company, XM. In addition, the development of new
technologies before the competitors and adding new features to the receivers will have
the same result.