March 12, 2009
Sirius To Stream Service To iPhones, iPods This Spring
Just days after avoiding bankruptcy, satellite radio provider Sirius XM said Thursday that will try to expand the reach of its service to users of Apple Inc.'s iPhone and iPod devices this spring.
The company also said it is exploring a potential marketing deal with DirecTV Group, the largest U.S. satellite TV provider.Sirius, which recently sold a 40 percent equity stake to Liberty Media to avert looming debt problems, is seeking new revenue streams as its top distribution outlet, sales of new cars, has a "terrible" outlook for the year, the company said Thursday.
Sirius said its new application will be available to its 19 million subscribers as well as Apple Inc.'s 7 million U.S.-based iPhone users. The service will also be available to iPod Touch Wi-Fi users.
"This is a large and interesting opportunity that will maintain our subscription-based economics while providing customers easier access to our content through means other than our traditional satellite-based platform," said the company's Chief Financial Officer David Frear on a conference call with analysts.
Sirius, which also sells satellite radios through conventional retailers, had a poor fourth quarter after one of its major customers, electronics chain Circuit City, filed for bankruptcy.
"There's a lot of opportunity for (Sirius) with iPhone," a Reuters report quoted Miller Tabak analyst David Joyce as saying.
"Unlike buying a new car, it's not an expensive proposition, but it's a tough time for consumers to be trying new products."
According to data from January and February, car sales are projected to fall to between 9 million and 9.5 million in 2009, a significant drop from historical volumes of 16 million to 17 million annually, Sirius said.
Nevertheless, the company said it was benefiting from "truly extraordinary" operating efficiencies after its prolonged acquisition of XM Satellite Radio, a deal that closed last year.
Sirius said 2009 would be the first year it would post positive earnings before interest, taxes, depreciation and amortization (EBITDA), which it expects will exceed $300 million. Analysts' average estimates as compiled by Reuters Estimates are $303.4 million.
However, the company said it was impossible to predict revenue or provide a detailed outlook given the current U.S. economic conditions.
CEO Mel Karmazin said he had been in discussions in recent days with DirecTV CEO Chase Carey and Liberty Chief Executive Greg Maffei regarding potential joint-marketing opportunities.
Liberty holds a 48 percent controlling stake in DirecTV, and some have speculated about an operational partnership with Sirius.
"We think that there are opportunities to work with lots of partners, including DirecTV, on ways of adding subscribers for both companies," Reuters quoted Karmazin as saying.
"It wouldn't be hard to think about the fact that DirecTV might be able to have a special package for many of their subscribers to be able to get Sirius at an attractive price."
Sirius shares were up 19.6 percent, closing at 19.1 cents on Thursday.
On the Net: