XM radio, like magazine publishing depends more on
advertising revenue than subscription customers. But
advertising rates will vary with the number of subscribers
who are feed the ads.


"Jonathan Goodish" wrote in message
...
| In article ,
| Andrew Gideon wrote:
| I do wonder, however, about how
| $12/month is going to sustain the contracts for tens
or hundreds of
| millions of dollars for on-air talent; at some point,
there has to be a
| line in the sand for the providers.
|
| Keep in mind that, aside from acquisition costs, new
customers cost
| nothing. That is, the infrastructure is the same for
one customer or one
| trillion customers. There *is* a number of customers
where $12/month
| covers that infrastructure.
|
| This isn't true. New customers do not represent zero
cost. While the
| broadcast infrastructure may be able to serve "trillions"
of customers,
| the customer service, billing, maintenance, etc. all have
costs that
| increase as subscriber count goes up. In addition, the
infrastructure
| will require periodic capital improvements, both as
subscriber count
| grows and as technology changes.
|
| That being said, it appears that both XM and Sirius are
focused on
| market share and not profit at this point. Of those two
goals, only
| profit is required to sustain a company, so there must be
some long-term
| objective that would benefit from market share
position--such as
| advertising sales.
|
|
|
|
| JKG