First off, an admission. I've been an XM subscriber for more than 6 years. I've seen the company grow from a few hundred thousand subscribers to now more than 9 million.
Their product is excellent despite the fact their customer service is beyond atrocious. But the latest financial results make me question how long they'll stay in business. When the company went public they said the break-even point was 4 million subscribers. Now, despite a $3 a month increase, 9 million subscribers AND commercials on their non-music channels they lost a staggering 682 million in 2007 on top of losing 719 million in 2006. That's 1.4 billion dollars in just 2 years. To give you some perspective that's a bigger annual deficit than the US Government, even with that money pit called Iraq. Then, with a straight face, their CEO says "XM substantially improved its business operations in 2007". Huh? This company has lost roughly 1.85 MILLION DOLLARS A DAY for the last 2 years, not to mention all the previous years losses. I didn't bother to look up the loss figures at Sirius, but you have to wonder how long these companies can do this. Eventually the credit lines will run out. I hope satellite radio won't be relegated to a half-forgotten "how satellite radio flamed out" wikipedia article like Pets.com or AOL's dialup business.
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