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Mm Final

  1. 1. Satellite Radio Sirius Vs XM
  2. 2. Group Introduction Anil Kumar Dayal S-10 Anil Goel S-11 Anil Kumar S-12 Ankit Agrawal S-13 Ankit Barua S-14 Apurva Saxena S-15 Arun Yadav S-16 Ashish Khurana S-17 Atul bansal S-18
  3. 3. Agenda •Satellite Radios – Working •Beginning of an era – Sirius/XM •Market Analysis •Sirius vs. XM Sirius •The need and benefits of Merger •CEO’s word •Summary & Conclusion
  4. 4. How Do Satellites Works How Do Satellites Work.flv
  5. 5. SATELLITE RADIO ? A satellite radio or subscription radio (SR) is a digital radio signal that is broadcast by a communications satellite,which covers a much widergeographical range than terrestrial radio signals.
  6. 6. Satellite Radio Satellite Radio.flv
  7. 7. As the satellites orbit the earth, programs are beamed to them from broadcast stations. The satellites then transmit the signal to special antennas on homes, cars and portable radios. Terrestrial repeaters throughout the country also receive the signal and help ensure that it's transmitted to receivers, especially in areas with tall buildings that might block the signal.
  8. 8. Satellite Vs Terrestrial Subscription based Geographical range Superior Quality Reliable Technology More Variety
  9. 9. Satellite Vs Terrestrial Subscription based Superior Quality Reliable Technology Covers a much wider geographical range than terrestrial radio signals More Variety
  10. 10. The Beginning….. Allocation of spectrum for national broadcasting of satellite based digital audio service in 1992 Sirius and XM received approval to broadcast from FCC in 1997 Launch of satellites by XM & Sirius Technological challenges gave XM a head start over Sirius
  11. 11. Challenges FCC license and accompanying dedicated radiofrequency band Extensive up-front capital needed Proving to investors that returns will out weigh risk Infrastructure Getting customers to pay for a service that has been and still is free Radio industry is basically in the Sales decline stage of the product lifecycle Coping with Interference from Other Competition
  12. 12. USP Provide an improved listening service Allow listeners a commercial free and clear digital sound Provide listeners more variety of stations when they want them
  13. 13. Threats Competition Total Satellite failure Rapidly changing technology could leave Satellite Radio to be an obsolete service
  14. 14. Opportunities Subscription Charges Sale of Receivers Accessories Advertisements
  15. 15. Sirius XM Satellites 3 satellites 2 satellites Programmi 130+ channels, including: 170+ channels, including: ng •69 commercial-free music channels •70 commercial-free music channels •18 news and talk channels •92 news, sports, talk and •11 entertainment channels entertainment channels •11 local traffic and weather •21 traffic and weather channels channels •Major League Baseball , NBA •NFL football, college sports, NBA basketball, NHL hockey, college basketball, soccer, horse racing, golf sports, golf and IndyCar and NASCAR Highlights Howard Stern Bob Dylan Martha Stewart Oprah Winfrey A weekly rock show with Opie & Anthony skateboarder Tony Hawk Shows hosted by Snoop Dogg, Tom NBA and NFL games Petty and Quincy Jones Three video channels FOX sports radio Listen on the Internet for free
  16. 16. Price $12.95 per month $12.95 per month for basic ($16.99, including the package ($16.99 including Best of XM) the Best of Sirius) $15 activation fee over $14.99 ($9.99 online) the phone; $10 online activation fee Availability The continental United The continental United States and Canada States and Canada Subscribers 8+ million in 2008 9+ million in 2008 Already Available installed in Available installed in a Installed many cars, including variety of cars, including Chrysler, BMW, Mazda, Audi, GM, Honda, Nissan, Mitsubishi, Toyota, Hyundai, Toyota and Volkswagen and Ford Porsche models cars
  17. 17. XM Satellites used Two Boeing HS 702 – nicknamed "Rock" and "Roll“ XM launched "Rock” on March 18, 2001, with "Roll" following on May 8 of the same year. A design flaw in the HS 702 satellite caused its solar panels to function inefficiently. Two BSS 702 satellites it calls "Rhythm" and "Blues“ XM launched "Rhythm" on February 28, 2005, and "Blues" on October 30, 2006, to replace the older satellites. XM Radio powered down "Rock" and "Roll.“ The older satellites remain in orbit and can serve as backups, if necessary.
  18. 18. Sirius Satellites used Sirius used three SS/L-1300 satellites, instead of GEO satellites, to form an inclined elliptical satellite constellation. Elliptical path of the satellite constellation ensures that each satellite spends about 16 hours a day over the continental United States, with at least one satellite over the country at all times. Sirius completed its three-satellite constellation on Nov. 30, 2000. A fourth satellite will remain on the ground, ready to be launched if any of the three active satellites encounters transmission problems. In 2006, Sirius purchased a GEO satellite because of its superior signal delivery. The GEO satellite will supplement the elliptical satellites, not replace them. It is currently under construction.
  19. 19. WorldSpace Worldspace has been the farthest-reaching company in the satellite radio industry. It put two of its three satellites, AmeriStar, AfriStar and AsiaStar, in geostationary orbit before either of the other two companies launched one. It has invested in Sirius XM Radio and has an agreement with the company to share any technological developments.
  20. 20. Mar ‘2005 3.5 250 3 200 2.5 2 150 Sirius Sirius 1.5 XM 100 XM 1 50 0.5 0 0 Subscriber Base ( Millions ) Revenue ( $ Million )
  21. 21. Why XM? Saved Valuable time by tying up with experienced firms like Pioneer ,Sony. Offered less expensive and more sophisticated receivers . Aggressive marketing strategy : tied up with several large automakers , AIRLINES
  22. 22. Cost per New Subscriber SIRIUS XM 0 50 100 150 200 250 Cost per Subscriber ( $ )
  23. 23. Merger - Need Both the companies entered into a merger on July 29, 2008 Mounting Losses – Both companies are loosing money big time and no sign of making break-even soon. Market Segment – The subscriber growth in the industry itself was not that high and was not sufficient enough to support even two companies. Redundant Hardware – Due to regulatory requirement the hardware had become redundant as the broadcast from both the companies should be supported on both the hardware.
  24. 24. Merger - Benefits Both the companies entered into a merger on July 29, 2008 Cost -Both companies will operate as one, this will reduce the cost of licensing the broadcast material . Variety - If all of the non-duplicate channels are kept, this will result in more programming being made available to subscribers of both services New development - the new company can afford to spend more money to develop new products
  25. 25. Merger - Benefits Wide coverage of Automakers via partnership for offering satellite radio as original equipment. Ford GM Lincoln Cadillac Chrysler BMW Mercury Chevrolet VW Dodge Toyota Provid MINI Volvo Buick Honda Hyundai Mitsu Nissan Por Audi Suzu Mercedes- Lexus er Rolls- Land Pontiac Acura Kia bishi Infiniti sche Bentle ki Benz Scion Royce Rover GMC y Jeep Jaguar Saturn Mazda Saab Sirius Yes Yes Yes No No Yes Yes ? No Yes Yes No XM No No No Yes Yes Yes No Yes Yes Yes No Yes
  26. 26. Numbers after the merger Total Number of subscribers 18.6 million for Sirius XM radio Income Statement
  27. 27. Numbers after the merger Income Statement – Quarterly Last three quarters have been profitable
  28. 28. CEO’s Word
  29. 29. Road Ahead Free or terrestrial radio Attracts 225 million listeners each day Clear channel has reduced adv time from 20 min/hr to 12 min/hr to gain listeners Advent of HD Radio Localized Content Internet Music on cell phones, MP3 player & computer Podcasters
  30. 30. Market Penetration
  31. 31. Thank You