A Banc of America securities analyst reported this week that the enormous costs of signing A-list talent for on-air programs will delay Sirius and XM's plans for moving to profitability. Both
sat-service companies have been signing subscribers at a brisk pace, but they also have been in a competition to do deals with popular personalities. For example, Sirius just signed Sex and the
City author Candance Bushnell to her own show, and only weeks ago XM inked a deal with Oprah Winfrey. Banc of America's Jonathan Jacoby says that while he remains "positive" about the industry, it
will take longer than initially anticipated for Sirius and XM to make money. Says Mediaweek: "Sirius will spend about $240 million this year on programming and content--and about $16 million of
those costs this year will come from deals already announced, including [Cosmopolitan, Playboy, Blue Collar Comedy, the renewed Fox News/Fox News Talk deal and the recently announced
Court TV deal." The picture at XM is much the same, meaning investors will need to be patient as satellite radio companies blast through these early, expensive stages of development.
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