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Discussion Starter #1
Well the merger was approved today so how did XM Canada do over the last 5 plus years.

Stock was sold in 2005 at $15 a share.
Current price about $3 per share.
Result is an 80% loss to shareholders.

Shareholder Count
John Bitove promised a million subscribers by August 31st, 2010
Actual number of paying subs by August 31st, 2010 - 432,000

So Mr. Bitove's company lost shareholders 80% of their money in five years and didn't even get to half the number of promised shareholders.

Interestingly Sirius, the company that will own 58% of the combined company passed the 1 million paying subscriber mark in January 2010.
 

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I think many people will say it wasn't XM Canada's fault. They will simply say it was Howard Stern coming to Sirius.

Reasons I think (in order of importance) of why Sirius succeeded and XM didn't

  • In the beginning, Sirius offered more stations than XM in Canada at a better price.
  • Sirius was perceived as offering better reception outside of Canadian urban centers.
  • Sirius Canada out hustled and out marketed XM Canada. Paid more attention to the retail market while XM stuck with Automotive.
  • Howard Stern

In 2006, XM Canada was charging the same price as Sirius but Sirius was offering way more channels. I think once Sirius got the lead, the perception quickly became that they were the leader.

Sirius totally out marketed XM.

XM just assumed they didn't need to market because everyone would buy a car, get a free sub for three months then sign up.

Sirius went after the retail market and got high awareness so people bought the after market radios.
 

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Sirius may have offered more channels but XM had traditionally offered deeper playlists. That was a big reason why I chose it over the dogstar when I signed up in 2006.

Since the official demise of XM on November 12, 2008, the playlists have gotten crappier and the dj's more inane. While I agree the decades channels weren't that great pre-merger, they're an absolute disgrace now. MTV relics doing air time on 80's on 8? WTF?

Anyway, just my $0.02.
 

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Discussion Starter #5
. That was a big reason why I chose it over the dogstar when I signed up in 2006.
But you were the minority.

Anyway, the thread is not about why you signed up to XM. The thread is about the fact that XM Canada failed in the marketplace and why.
 

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the part i find confusing is that XM had most of the sports that Canadians want like the NHL. i understand one of the reasons in the US Sirius started surpassing XM was because they had the NFL and NASCAR.
 

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Discussion Starter #7
I don't think NHL really is a big draw. Most people listen to the home team which is usually broadcast on AM radio.

In Toronto, the low end AM stations can be heard 100 miles away from the CN tower so who needs satellite radio? I'm sure that's true for Montreal, Vancouver, Ottawa, and Calgary which accounts for a large portion of the Canadian population.
 

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you know you're right about that i forgot about this fact. also i remembered my friend telling me on his XM sub now they started charging for online listening which might have put the final nail in the coffin for XM
 

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For me, when I initially signed up, having CBC partner with Sirius meant a better chance of survival. I have both now, but have yet to pay XM a cent for my car sub, which we've had for 14 months.
 

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I agree with you Hugh that XM has failed to meet their promises or expectations in the terms of paying subs and share value. There a many pros and cons that can be debated back and forth but in the end I still think it comes down to having two providers competing in too small a market. Someone had to loose and it was XM who lost first. However stating that XM has been a failure sort of implies that Sirius Canada has been a sucess however I think that both companies were doomed from the start and even after the merge into one company I believe that the business model for Sat radio in Canada simply doesn't work and that Sirius/XM will fail as well.
 

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Discussion Starter #11
Remember John Bitove was crowing that he would have a million subs. The expectation was that if XM had a million subs by August 2010 then it would be raking in Cash hand over fist.

Now Sirius Canada has over a million paying subs so I imagine its quite profitable.

What surprised me is that Sirius only took 58% of the merged company.

Based on profitability, subscriber base etc, Sirius should have held out for 75% or so. My only guess is that Sirius XM forced the merger in Canada and Sirius took 58% rather than potentially losing its relationship with Sirius XM in the U.S.
 

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Actually, XM was cheaper than Sirius in the beginning. XM was $12.99 per month while Sirius was $14.99 per month.

As a result of this competetive price edge, XM was ahead of Sirus in the beginning months of satellite radio in Canada. Adding to this advantage was that Sirius Canada initially stated that they would not be carrying Howard Stern because they thought the CRTC or special interest groups would protest and/or shut them down. This allowed XM Canada to jump out in the lead.

But due to many Stern fans writing and calling Sirius to add him to their programming, Sirius Canada realized that in order to be successful they would need to add Howard Stern to their lineup. As soon as this happened, Sirius subscriptions in Canada (and the U.S., by the way) flooded in and XM was left in the dust.

I know people find it very hard to admit it (especially those that are not fans), but the only real reason Sirius badly beat out XM in Canada is Howard Stern.
 

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XM could have done a better job of promoting the antenna attachment for home AV receivers. While many receivers are "XM- (and/or Sirius-) Ready", it is almost impossible to find the antenna attachment you need to activate the service. None of the dealers in Toronto that I talked to had any idea about which one you need or how to get them.

The only place that I could find them was by online ordering from Future Shop -- they don't appear to be available "in store" anywhere.

EDIT: I wonder what the total number of "home receiver" subscribers XM has in Canada. 50? 100?
 

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Yes, the mini-tuner kit in its various incarnations. I have one that is an antenna and tuner all in one unit and a newer one that has an antenna, plus a separate dock for a tuner card (my newer receiver wouldn't work with the old unit).
 

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Discussion Starter #16
Guys, please lets stay on topic.
 

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Seeing as how XM Canada was a failure, one wonders exactly how Mr. Bitove managed to become the majority owner of the new merged entity?! I wonder what this means for this new company- will it fail as well since the same company is heading it up that was in charge of XM Canada?!

Here is the new ownership structure (Voting shares):

CSRI Inc (Bitove)- (30.3%)
Sirius XM- (25%)
CBC- (20.4%)
Slaight Communications- (20.4%)
Publicly owned- (3.9%)
 

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Discussion Starter #18
one wonders exactly how Mr. Bitove managed to become the majority owner of the new merged entity?
Perhaps because Mr. Bitove is the one person that made a lot of money off of XM both in the IPO and subsequent years in compensation?

What's really shocking is that he will own 22.5% or so of the shares but have 30% of the voting rights. The other shareholders seem pretty stupid to accept this.
 
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