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Cox Seeks to Prick Satellite Radio Bubble

Cox Seeks to Prick Satellite Radio Bubble

Cox Radio President/CEO Bob Neil says that satellite radio’s financial situation is “dismal.”
Reacting to a recent glowing article in the Wall Street Journal about satellite, Cox also said satellite’s listener total of 4 million is tiny compared to 250 million for terrestrial radio.
In a letter published by the Journal, Neil writes: “As the head of the third-largest radio broadcasting company (by revenues) in the U.S., reaching 13 million listeners each week, I fail to see how satellite radio is ‘on the verge of reaching a critical mass.'”
XM and Sirius have combined revenues of just over $300 million, compared to the combined revenues of $2 billion for the top five “pure play” radio companies of Cox, Entercom, Citadel, Cumulus and Radio One, according to Neil.
Further, he points to a combined $500 million in free cash flow for those five companies compared to a deficit of $655 million for the satellite radio companies.
The bottom line, according to Neil: Satellite’s impact on traditional radio is “minimal,” and he likened its appeal to “specific tastes” rather than the mass market.
“Even if satellite radio achieves the success of satellite television, it would still be a niche product reaching less than 10% of the population, vs. traditional radio’s 94%.”

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