WHISTLER, B.C. – Canadian Satellite Radio CEO John Bitove said today that XM Canada sales are going "extremely well" and that the company will boost its subscriber guidance when it announces its first full quarter financial results in two weeks.
In January, the company predicted that it would have 75,000 customers by the end of its fiscal year, August 31st, 2006. However, at an RBC Capital Markets conference this morning in Whistler, Bitove said that retailers ordered about 100,000 radio units before the Christmas holiday season and with sales going well, "we’ll probably be revising our (subscriber) numbers," he said.
(Bitove also added that Sirius Canada’s addition of Howard Stern to its programming lineup is not a concern, calling it a "one-time event" that will provide a short term boost to his competitor.)
At the top of his in-box right now, however, is completing deals with the big four Asian automakers, Honda, Toyota, Nissan and Hyundai to install XM radio. The automakers have deals with XM in the States and Bitove said he’s confident he’ll have agreements for Canada before the end of the fiscal year.
So what’s down his in-box pile a bit – but still important – is adding video to XM’s service, he said.
"The technology is there – but there’s a bandwidth issue right now," he said. "It’s a certainty that video will be coming on board as one of the collateral revenue streams… It’s not like it’s something that’s way way off. It’s realistic and something we’re all trying to bring to fruition."
What was left unsaid is what type of video XM might offer – not to mention the regulatory hurdles that would likely have to be cleared (they let journalists listen to these things only, so I couldn’t ask).
Other items in the XM Canada pipeline include using its network of terrestrial repeaters to transmit data or other audio, including local weather and traffic information directly to customers’ cars – which would mitigate some of the criticism of sat rad that says it can’t provide local information to drivers and other subscribers. "We’re looking for alternate uses for those repeaters, with other technologies whether it’s video or additional programming, we want to continue to increase our service offer," Bitove said. "We want to add more technologies to them so our revenue stream can grow."
Bitove also added that with its monthly subscription price of $12.99 and Sirius Canada’s at $14.99, there’s room for a rate increase. "It does leave some room for us to change our pricing," he said, quickly adding that nothing is imminent. "We know we have some room there… to make some adjustments if we want to."
When it comes to threats to the sat rad business model, it’s not knowing how media convergence will play out "that keeps me awake at night," Bitove said. "If you look at this unit, it’s not that far from a cell phone."
But what about when it comes to competition from iPods and their ilk? "Our job is to have great programmers so people don’t have to download and program their own music and deal with PC crashes and so on."
So, asked one attendee, where does he see the business long-term? "If you think I’m going to be happy five years from now if we’re just in satellite radio with just a few product offerings, the answer is ‘no.’ We’re going to go after everything we can to grow this business in whatever vertical or horizontal ways we can."
