Sirius Sees 6 Million Subscribers by End '06
NEW YORK – Sirius Satellite Radio Inc. (SIRI) said it expects the pace of subscriber additions to increase in 2006, as the company looks to capitalize on exclusive deals with automakers and programming such as the Howard Stern show.
The company, which trails XM Satellite Radio Holdings Inc. (XMSR) in total subscribers, expects to end 2006 at 6 million subscribers, an increase of 2.7 million, from 3.3 million at the end of 2005. The company added 2.3 million subscribers in 2005, including 1.1 million additions in the fourth quarter --well ahead of its target of 825,000 subscribers.
The numbers beat Deutsche Bank analyst James Dix's estimates, who expected the company to add 914,000 subscribers in the fourth quarter and 2.6 million subscribers in 2006.
Howard Stern, who debuts on Sirius on Monday, was lured to the satellite radio network with a five-year, $500 million package. The shock jock and his agent Don Buchwald were also issued 34.4 million shares of stock deliverable in December 2010. They could get the shares earlier if the company beats certain subscriber targets.
At the current price, those shares are worth $220 million.
In addition to Howard Stern, the company is also betting that it can close the gap with XM through exclusive deals with Ford Motor Corp. (F) and Daimler Chrysler (DCX).