Audit Integrity recently names Sirius XM Radio Inc. as being one of the companies that are on the fast-track to bankruptcy. Looking back, what is it that has caused the possibility of a Sirius XM bankruptcy? As a political advisor who has to understand all aspects of business, and because of the fact that I worked closely with one of Sirius’s sellers and one of it’s vendors prior to the purchase of XM, I offer these reasons for a possible Sirius XM bankruptcy.
Confusion of Service
If customers are confused about how your system works, they will be leery to invest in it. Sirius XM has always spent more time talking about their programming than explaining how their system works. Granted, technical speech would go over most people’s heads, a basic understanding of the product could have pushed away a possible Sirius XM bankruptcy.
Purchase of XM by Sirius
Not only the actual purchase of XM cost Sirius a lot of money, but the following investigation by the United States government into monopoly charges cost even more. According to one of my sources inside Sirius XM, more money was spent on the monopoly hearings and research about how to get the two systems to work together than was spent on the original purchase. The loss of cash on hand scared investors and led to the possibility of a Sirius XM bankruptcy.
Once again, the money that was spent on research during the purchase of XM was misplaced. Many of the issues that customers had complaints about went unchecked as Sirius and XM tried to figure out how their technologies could work together. This lowered customer satisfaction and subscriptions. Yet, another step towards a Sirius XM bankruptcy.
Honestly, how many people can you think of will want to spend money each month for commercial-free programming when the economy is in the toilet? Many former subscribers have had to leave Sirius XM to conserve money in these tough times. With an unemployment rate that is floating up to 10%, even $14 or $15 a month needs to be saved. The current economy has brought the chances of a Sirius XM bankruptcy closer than ever.
What will happen to the satellite radio industry if there is a Sirius XM bankruptcy? It might just kill the concept (at least for the short-term) since they have the market in pocket. Only time will tell if this nightmare for the industry comes true. If the economy stays the way that it is right now, chances are good that a Sirius XM bankruptcy will become a bitter reality.