On Wednesday Sirius XM radio (SIRI) announced that it added 171,441 net subscribers in the first quarter of 2010. While this is certainly better news for the company than a net loss, the gain still doesn’t quite put its subscriber base at the same level it was at the end of 2008. Then the company had 19 million subscribers, but tumbled during the first quarter of 2009, losing 404,422. Subscribers now stand at 18,944,199.
Sirius CEO Mel Karmarzin attributes the rebound to “the broad appeal of our unrivaled programming, the benefits of a recovering auto industry and an improving economic environment for consumers.” I’d reckon that increased car sales is probably the biggest factor, given that satellite radio is heavily dependent on its appeal to drivers, most of whom still can’t listen to internet radio while on the road. The downside of this reliance is that the first year or so of satellite radio service for a new car is free. The real sign of recovery will be whether or not these new non-paying subscribers re-up when they have to shell out for it. For the quarter that just ended 45.2% of customers decided to stick around and pay, which is a little better than the 44.6% who did in the first quarter of 2009.
The news caused Sirius stock to bump back up over a dollar today for the first time since February. Nevertheless, the company remains
delisted from out of compliance with NASDAQ. It will be interesting to see if Sirius’ subscriber base grows over its 2008 level again, or if 19 million ends up being a plateau. Satellite radio faces very still competition from mobile broadband this year as higher-speed 4G rolls in many major cities and those first Pandora-capable car radios hit the streets.