Sirius Narrows User Gap
A blistering satellite-radio rivalry is racing toward equilibrium.
For the second quarter ended June 30, XM added 398,000 net subscribers for a total of 6.89 million users. Meanwhile, New York pay-radio challenger Sirius signed on 600,460 net new users, pushing its subscriber roll to 4.7 million.
Shares of XM fell a penny to $14.48, and Sirius rose 13 cents to $4.61 in midday trading Thursday.While XM still has the larger user base, the suggestion that there's a big difference between the two companies may be inaccurate, some industry observers say. The entire satellite-radio market is split between two players that have comparable technology. On the marketing side they have a nearly equal portion of car-making partners and retail outlets. Therefore, the idea that one will emerge clearly victorious may be mistaken, say observers. Barring any major failures or interruptions to the businesses, the race is destined to end in a tie, says Sanford Bernstein analyst Craig Moffett, in a research note. Moffett has a buy rating on both stocks. "Broadly speaking, in any duopoly subscription business, there is a tremendously strong pull toward 50/50 market share," Moffett writes. The debut of Howard Stern has certainly spurred subscriber growth for Sirius, but satellite watchers say that only helps the company recover ground it surrendered by being a year behind the launch of XM's service. "Sirius will rapidly gain share, but only because it is smaller than XM. Once it catches up, its share gains will stop," Moffett says in the note. XM has had
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV