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Tough times at both XM and SIRIUS

MoneyThe New York Times has a couple stories on the fortunes of both XM and SIRIUS. The first details how Pierce J. Roberts has resigned as a director on the board of XM. Roberts felt that the company is generally going in the wrong direction and will lose cash faster than it will gain subscribers, especially by pricing the subscription too low. The cost of attracting each new subscriber has increased in the last year from $64 to $89 per acquisition. That increase is likely coming from a growing ad budget.

The second tells of how SIRIUS lost $311 million in the third quarter of 2005. That's up from $261 million in the same period in 2004. Once again it's the cost of acquiring new customers that seem largely to blame. This time, though, those costs have actually gone done for SIRIUS, from $124 a year ago to $113 today. Still, that's a lot of money to spend to attract new business. SIRIUS says it expects to be profitable next year.
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