• by Erik Sass , November 9, 2006

A few days after it reported a declining number of new subscribers in the third quarter, Sirius Radio released quarterly financial results Wednesday, showing that losses had declined as well. With both Sirius and XM's third-quarter performances now available, it's clear they follow similar arcs, continuing to parallel each other even as they compete.

Although the rate of new additions is slowing, both companies are posting smaller losses than before, and finding favor with Wall Street. In the third quarter, Sirius' net loss was $162.9 million, down from $180.4 million in the third quarter of 2005. It's an even bigger drop from the company's second-quarter loss of $237.8 million and a first-quarter loss of $458.5 million, strongly associated with high marketing costs surrounding Howard Stern's move to the company.

For its part, XM's third-quarter loss was just $83.8 million, down from $131.9 million in the same quarter last year. That's also a huge drop from the company's second-quarter loss of $229 million and first-quarter loss of $149.2 million.

Sirius' declining losses are due in part to lower acquisition costs for new subscribers. In the third quarter, Sirius spent $114 on average to acquire each new subscriber, down 23% from the third-quarter 2005 figure of $149. XM's cost for acquiring each new subscriber rose slightly in the third quarter of 2006 compared to the same period of 2005, from $89 to $93. But it was down substantially from $112 in the second quarter of 2006.

In the third quarter, Sirius signed up about 441,000 new subscribers--a noticeable decline from its net addition of about 600,000 in the second quarter and 761,000 in the first. The company now has just over 5.1 million total subscribers. XM has also experienced a slowdown in new subscriber additions, with just 286,000 new subscriptions in the third quarter, compared to 640,000 in the second quarter and 569,000 in the first.