Getting Sirius: Howard Stern and the magic number

Five million subs and counting. But what's the magic number?

Sirius just released its third-quarter subscriber data: more than 5.1 million subscribers. That more than doubles the 2.2 million subscribers Sirius reported a year ago. Sirius claims it's out-grown competitor XM Satellite Radio for four straight quarters.

It was about two years ago that Howard Stern and Sirius announced their deal. Recently I blogged about Stern's lower ad rates on sat radio compared with his old terrestrial radio net. As several readers pointed out, that's only part of the formula.

Sirius currently charges $12.95 a month for a subscription. So every thousand subs means another $155,400 in revenue for Sirius. As cable TV does, sat radio gets two major revenue streams: subs and ads.

So what's the magic number? When does Howard Stern become a profitmaker for Sirius? We may have passed that number some time ago. Stern and his production staff reportedly cost Sirius $100 million a year. That's roughly the income from 644,000 subs at the current monthly rate.

And Sirius may be expanding beyond an audience that's largely been limited to in-car use. Just last week a Wi-Fi equipped radio launched for Sirius subscribers.

Finally, Sirius is confident it'll have 6.3 million subs by the end of this year.