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Last updated: Monday, August 10, 2009

When Erin Patton, a 39-year-old branding consultant in Dallas, traded in his Cadillac Escalade for a Porsche Cayenne in May, Sirius XM nearly lost a subscriber. The Caddy had satellite radio; the Porsche didn’t. So Patton downloaded Sirius XM software for his iPhone. “It was convenient,” he says. “I was extremely impressed by some of the functionality,” like the ability to buy songs from Apple’s iTunes store. Now he’s back in the fold. But Sirius hasn’t been so lucky with a lot of its customers. The company reported Aug. 6 that it had lost nearly 186,000 subscribers during the second quarter ended June 30. That was an improvement from the 400,000 subscribers lost in the first quarter, but still not a hopeful sign. Awful car sales during the past year have eaten into the company’s subscriber base, as have recession-bitten consumers cutting back. And despite a foray into the world of iPhone software, Internet radio services may eventually make satellite radio superfluous. Sirius narrowed its second-quarter loss to $171.3 million from $203.5 million a year ago. Revenues grew 1 percent, to $608 million. But a return to vigorous growth could take a while. Dwindling Expectations Listeners who downloaded Sirius XM’s iPhone app have been mostly existing subscribers who got to use the app for free; the software drew in few new customers. “Cash for clunkers” car buyers aren’t getting satellite radio pre-installed in great numbers. And radio personality Howard Stern’s contract runs out at the end of 2010, which may take away a key reason many subscribers have for keeping the service. “The outlook for Sirius hasn’t changed substantially,” says Susan Kevorkian, a program director at market researcher IDC. James Goss, an analyst with Barrington Research Associates, estimates Sirius could lose 1 million subscribers this year, ending 2009 with 18 million. Tuna Amobi, an analyst with…

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Sirius XM Battles for Subscribers

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