XM Radio Canada released unaudited subscriber numbers this week which show that, as of May 30th, the company had 80,000 satellite radio subscribers. The number of XM subscribers has grown by 60% since the end of February.The numbers were good news for the company which had originally predicted that it would have 75,000 subscribers by August 31st and 10 million by 2010.
Although the numbers seem promising based on original estimates, the bad news is that XM Radio appears to significantly falling behind Sirius satellite radio in its bid to woo Canadian consumers. Sirius announced http://www.digitalhomecanada.com/content/view/1222/51/ four weeks ago (May 10th) that it had reached the 100,000 subscriber plateau therefore XM has fallen well behind in the race to be Canada’s leading satellite radio provider.
Numbers released by both companies at the end of February showed that both Sirius and XM had approximately 50,000 subscribers in Canada. Using the recent numbers provided by both companies, it means that XM is currently signing up about 10,000 new subscribers per month (30,000 new subscribers in 3 months) whereas Sirius is signing up about 20,000 new subs a month (50,000 in about two and a half months).
The slowdown in growth numbers seems to be affecting XM in Canada and the U.S.. In May, XM Satellite Radio in the U.S. projected that it will end 2006 with 8.5 million subscribers compared to the company’s earlier prediction of nine million subscribers by the end of 2006.
In an apparent effort to close the gap with Sirius, XM announced last quarter that it had increased the number of stations it offers in Canada from 80 to upto 100. Not to be outdone, Sirius upped the number of stations it carries in Canada from 100 to 110.
Despite falling behind in the satellite subscriber race, the company was able to announce a new distribution agreement with Toyota Canada. Under the agreement, XM Canada will supply satellite radio service to select Toyota and Lexus vehicles equipped with XM-compatible receivers, beginning on August 4, 2006. XM will offer free activation, along with a three-month subscription that will be matched by TCI, for a total trial period of six months.
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Sanford C. Bernstein and Company said risks remained for XM Satellite Radio’s second quarter after it suspended shipments of two digital radios, among other products, which violated transmission standards set by the Federal Communications Commission.
In a filing with the Securities and Exchange Commission last week, XM said federal regulators had found its Delphi (nyse: DPH - news - people ) XM SkyFi II and Audiovox (nasdaq: VOXX - news - people ) Xpress radio receivers’ FM modulators — used to transmit satellite radio programming over an FM radio frequency — exceeded FCC limits.
So far, only shipments of the SkyFi II and Audiovox models have been suspended, but Bernstein analyst Craig E. Moffett said third-party retailers like Best Buy (nyse: BBY - news - people ) or Circuit City (nyse: CC - news - people ) could see disruptions to future supplies of FM modulator-equipped units.
Management told analysts at an investor event Monday that it planned to solve the FM modulator issue with a simple, low-cost retro-fit, which would be fitted onto units not already sealed and added outside units already packaged.
“All in all,” Moffett wrote in a research note to investors, “the shipping and retro-fit kits suggest the additional possibility of a delay in the supply chain.”
XM said it hopes the problem will be a “30 to 60 day” issue, Moffett said.
The analyst said the impact of the FM modulator issue on XM’s second-quarter results is still uncertain, but will likely raise subscriber acquisition costs and reduce unit volume.
For now, Moffett has maintained an “outperform” rating and $33 price target on shares of XM Satellite Radio (nasdaq: XMSR - news - people
Toyota Canada Inc. signs multi-year service distribution agreement with XM Canada for Toyota and Lexus vehicles - 0 Comments
Select Toyota and Lexus models to offer six-month trial of promotional satellite radio service - the longest complimentary offer in Canada TORONTO, June 5 /CNW/ - XM Canada (TSX: XSR.SV) today announced a multi-year distribution agreement with Toyota Canada Inc. (TCI) to supply satellite radio service to select Toyota and Lexus vehicles equipped with XM-compatible receivers, beginning on August 4, 2006. XM will offer free activation, along with a three-month subscription that will be matched by TCI, for a full trial period of six months - the longest complimentary offer for satellite radio service in Canada. "We are committed to exceeding the expectations of those who own, drive and ride in Lexus and Toyota vehicles, and that means delivering to Canadians the comfort and convenience features they demand," explained Kenji Tomikawa, President of TCI. "We are happy to be working with XM Canada to provide our customers with access to this state-of-the-art entertainment and information technology." TCI, which in Canada sold more than 175,000 vehicles last year and more than three million vehicles since 1965, recorded its best sales month ever in May 2006. "The growth of the Toyota and Lexus brands in Canada in the past five years alone has been astounding and we are excited that our popular XM brand of satellite radio will now be offered in these vehicles," said Stephen Tapp, XM Canada's President and COO. "We are thrilled to have Toyota Canada join our other auto manufacturing partners." "The Toyota and Lexus driving experience will be enhanced by XM Canada's incredible programming, dozens of commercial-free music channels, all NHL games and the entire Major League Baseball season, plus specialty programs like Bob Dylan and the FIFA World Cup," said Tapp. Under the multi-year service distribution agreement, for a limited time, TCI will contribute an additional three months, for a total of six months, of promotional XM Canada premium service on select versions of the Toyota Camry, Avalon, Solara, 4Runner and FJ Cruiser, as well as Lexus IS 250/350, ES, GS (including GS 450h), LS, RX 350 and LX 470. The subscription will include up to 100 channels of XM Canada's revolutionary programming, including the deepest commercial-free music playlists, NHL games coverage, FIFA World Cup coverage, Major League Baseball play-by-play game coverage, PGA TOUR and groundbreaking news, as well as the biggest names in comedy and entertainment. XM Canada is the only satellite radio provider in Canada to produce unique Canadian content from a street front studio located at Avenue Road & Davenport in Toronto as well as another broadcast studio in downtown Montréal. About Toyota Canada Inc. Toyota Canada Inc. (TCI) is the exclusive Canadian distributor of Toyota cars, trucks, sports utility vehicles and forklifts, as well as Lexus luxury vehicles, through a sales and service network of over 260 dealers across Canada. A consistent award winner for product quality and ownership satisfaction, Toyota has sold over three million vehicles in Canada. More information about Toyota is available at www.toyota.ca, or through the Toyota Canada Customer Interaction Centre at 1-888-TOYOTA8. About Canadian Satellite Radio Holdings Inc. Canadian Satellite Radio Holdings (CSR) Inc. (TSX: XSR.SV), CSR operates as XM Canada(TM) through its subsidiary, Canadian Satellite Radio Inc. XM Canada is the No.1 satellite radio service in Canada, creating unique Canadian content to be broadcast in Canada and the United States and has an exclusive Canadian licence from U.S.-based XM Satellite Radio Inc. (NASDAQ: XMSR), the leading satellite radio provider in the U.S. with more than 6.5 million subscribers. XM Canada offers listeners up to 100 channels for Canada’s lowest monthly subscription fee - $12.99. XM Canada offers the most NHL(TM) games, PGA TOUR(TM) and Major League Baseball(TM) coverage, and news, talk, sports and children’s programming across Canada. XM Canada launched its French and English satellite channels for all of Canada and the United States to hear on November 22, 2005. After next season, XM will become the exclusive provider of NHL games coverage on satellite radio. To find out more about Canadian Satellite Radio Inc., visit our website at www.cdnsatrad.com. To subscribe to XM Canada online or for more information about XM Canada’s programming line-up and radio choice, visit www.xmradio.ca.