TSS-Radio

After months of eagerly anticipating the SIRGM1 SIRIUS GM Connect we finally received our first small batch. It was only a tenth of what we had placed orders for back in November and December. That small batch we sent out to the first group that had pre-ordered it from us. We should be getting some more in over the next few weeks.

Product availability is something that our customers don’t always understand in the manner product gets to us. We place our orders with the distributors early, very early. When the product gets imported to them, usually from Asia, it will get shipped out to the dealers that had ordered it. That’s when it’s something that is easily available or in plenty supply. When it’s a product that’s in High Demand and Low Supply things change. And this is the case with the GM Connect XM to SIRIUS kit, as was the case with the Sirius S50. If it’s very popular and in lower supply, the distributor loses some power over who get’s shipped product and SIRIUS takes over a bit more. This is a common practice. SIRIUS may have a deal with Circuit City or Radio Shack or Best Buy in which they may receive a product earlier than the smaller independent dealers such as ourselves. The problem with the big box stores is that for the product to get from the main distribution centers to the actual consumer takes far longer in terms of time. For the most part we get things faster than the big box stores. It’s just unfortunate that at times we have many customers anticipating product from us and we have no control over it getting to us despite placing those orders far in advance.

This next week we have three big products coming in. The first one will be arriving on Wednesday, which is the SIRIUS Connect Home Tuner SC-H1. This was first announced at the 2006 CES Electronics show. It’s similar to the SIRIUS Connect Units for the Cars in the sense that it allows SIRIUS in a SIRIUS-Ready Unit, but this time it’s for Home Receivers. The next two products that we will be getting in on Thursday will sell fast, they are the Home and Car Kits for the Sportster 4, and later other SIRIUS Plug and Play Receivers as well as the SL100TK1. Not only is this a sigh of relief for Sportster 4 owners but it’s also a sigh of relief for those interested in the SL100 because once the SL100 comes out they will be able to have their Home and Car Kits ready to go. The SUPH1 is the awaited SIRIUS Universal Plug and Play Home Kit for the Sportster 4 and some newer model SIRIUS Radios, but currently only the Sportster 4. It will later work with the SL100TK1, the Sportster 3 ( a toned down Sportster 4), Starmate 3, Streamer GT3, and Streamer 3. If you have had a SIRIUS Home Kit before, the kit is pretty simple. It comes with the Home Cradle for the Receiver, a Wall Power Source for it, Home Indoor/Outdoor SIRIUS Antenna, and Audio Cables. As for the Extra Car Kit for the Sportster 4, we will also have the SUPV1. It includes everything you need to Dock the Sportster 4 Radio Receiver in another car. It includes a SIRIUS Radio Car Antenna, 5V AC Power Adapter, Car Cradle, and Mounts. We will allow orders to come in on Monday or Tuesday for the Kits that will ship out on Thursday.

Other than that, this next week we are also excited about our new Shipping option of DHL Express to Canada. Oh how fast it is.

Our Shipping to Canada thus far has been through the United States Postal Service which gets handed off to Canada Post once through customs. For the most part things have been fine. We label and declare the customs value for each package honestly. Things have been shipped to Canada one of three methods, Global Priority Mail which averages 4-6 Business Days and Global Express Mail which Averages 3-5 Business Days. Global Priority does not have an official tracking system like UPS or FedEx but it comes with a Delivery Confirmation Number which will at least show that the item has been successfully delivered once it has arrived at the destination. Global Express mail does have tracking, but it’s still a step behind UPS and FedEx.

Starting very soon, we will begin shipping packages to Canada using DHL. The DHl sales rep stopped by today and I was more than blown away by the service. It should begin mid next week. Ultimately shipping a package Next Day should be more reasonable to Canada than it is within the United States using UPS. They are very competitive. It’s one of those things you’ve heard in the past but never quite taken the step to initiate anything.

All in all shipping say a SIRIUS Radio Car Antenna to Canada using DHL will take one business day and will cost roughly the same as the United States Postal Service’ Global Priority Mail which take about 4-6 Business Days. I also sincerely hope that Canadian customers take advantage of it since DHL does not have the same Brokerage fees as does UPS and FedEx.

On a separate note, last nights Episode of “Entourage” was not what I had hoped. But next weeks episode is partly shot at a restaurant in Beverly Hills, CA that I used to work in called Mastro’s Steakhouse . This will have been the third episode that was shot there, and this one seems to take place in the Wine Room. There was a time a few years back where I was working there and Bill Clinton had a private party in there with many celebrities including Quincy Jones, David Spade, Owen Wilson, Leonardo DiCaprio, and many others. That same night, which was engraved in my memory, Conan O’Brien was there, he was hosting the Emmy’s later in the week, Britney Spears, and Joey McIntrye. I had the gumption to go up to Conan and tell him a joke based on the celebrities in the restaurant. He and his writers that he was eating with were more than kind, despite this being a fireable offense. They had told me that they’d consider the joke and play it the following week when he got back. Unfortunately the following week was the year anniversary of September 11. If you have a chance to watch “Entourage” it will be on next week on HBO usually around 11pm.

Somehow in the last week we got a lot of on Air Plugs. Maybe it just all landed on that one week. I’d love for it to always be like that. I was briefly interviewed by George Flowers on the Howard 100 News, Craig Gass mentioned us on the Jim Breuer show, and Steve Covino, “Covino” mentioned us as well on Octane. Thanks to all those for helping keep the SIRIUS sales up.

My personal weekend which only seems to last hours can always be frustrating for a number of reasons. It’s a balance of getting things together combined with working combined with attempting to relax. During the weekend always look forward to Monday-Friday since at least some solid work is getting done, not to mention new Stern shows breathing life into me.

Also Mondays is particularily good recently because of my new favorite show, “Entourage.” Artie Lange recently filmed an “Entourage” episode out in Los Angeles and that will definetely be a bonus. The show has some of the best cliff hangers ever.

This week we look forward to receiving our first batch of GM Sirius Connect Units on Wednesday. Of many many pieces we placed orders for back in 2005, we are getting a small batch. We have many customers who are eagerly awaiting their units but the supply is quite limited, which is very frustrating and once again, we have no control over getting more or not.

In a month things will be moving far faster with the introduction of the SIRIUS new Live Portable the SL100TK1, the new Universal Kits, the SUPH1, SUPV1, and SUBX1. For retailers, the Holiday Season is just around the corner.

At SeekingAlpha Rich Vanden Boogard just wrote: “They continue to lose more and more money as they grow subscibers. Adding subscribers doesn’t mean value’s been added and the stock should go up.”

In this case I would argue that it does mean that value has been added. Each month 1.8% of SIRIUS’ subscribers quit, according to the first quarter results announced by SIRIUS. That means that each year about 21.6% of Sirius’ subscribers quit. That means that the average customer stays with Sirius for (1/21.6%) 4.6 years. At $13 / month, 12 months / year that means that for every subscriber SIRIUS gets $722 in revenue, over 4.6 years for each subscriber that they sign up.

It costs SIRIUS $122 for each subscriber that they attract, according to SIRIUS’ 1Q results announcement.

In my view, that means that every time SIRIUS signs up a subscriber, they are netting $600 in profit. Why then wouldn’t value be added each time a subscriber signs up?

DailyTech just wrote a pretty negative article Sirius Pulls Some Radios Due to FCC Probe about how the FCC ruling that some of the FM transmitters are too strong on SIRIUS radios has caused SIRIUS to stop shipping a bunch of radios. I have three comments:

1. The picture that DailyTech attached to the article is of the Sportster4 (SP4-TK1) one of the few sirius radios that has a newer, weaker, FM transmitter and is not affected by the FCCs latest decision

2. The decision has had a significant impact on our business. A lot of the better selling radios, like the Sirius S50, are not presently available, and our radio sales have slowed - I would be very surprised if this did not affect SIRIUS’ financials

3. One great solution to this problem is to use a Wired FM modulator, to hardwire your SIRIUS signal into your car - they are not hard to install, they are only $20 and the sound quality is much better

One of our local papers here in Chicago, the SunTimes, has an article about HD Radio where some of the traditional radio broadcasters dismiss XM and SIRIUS as gnats.

Darren Davis, regional vice president in the Chicago market for Clear Channel, the radio giant, said, “Suddenly, there are twice as many radio stations in the market with a wide range of formats. And they’re for free.”

The latter point was a jab at fast-growing subscription XM and Sirius satellite services, which the big boys and girls in traditional radio dismiss as a gnat. A gnat that has attracted about 12 million paying customers since launching in 2001.

HD radio was introduced as a technology in the 1990s. Here in Chicago, in 2006, we have about 15 HD radio stations. I predict that the traditional radio guys are going to have a hard time piecing together the two pieces that they need to create HD as a format: 1. content and 2. an audience.

The cost of creating an HD radio stream is significant, and only a handful of people have the hardware to listen to it (a typical HD radio for your car costs $300), making it difficult for the big radio companies like Clear Channel to justify the expenditure. But until they do justify the expenditure they are not going to have a compelling reason for people to go out and buy new radios so they can listen to HD. A classic chicken-and-egg problem that faces adoption of most new technologies.

SIRIUS and XM also had such a problem, they had to gamble that they could attract an audience after spending billions to launch the satellites. At the rate they are going it looks like they are going to succeed, as they predict they will hit cashflow breakeven within the next 12 months.

It remains to be seen whether the traditional radio companies have the guts to invest significantly in new technology and bet that they can then attract and audience. Even if they do muster the energy to make such a bold move, they are starting late and it is possible that they will never get enough listeners to make it pay off.

Why did SIRIUS Radioand XM have the guts to gamble big while Clear Channel etc. sat by complacently? Because they had nothing to lose. Had Clear Channel pushed HD Radio 10 years ago they just would have stolen their own audience.

Reuters recently published an article about the faltering prospects of terrestrial radio companies.

The terrestrial guys are in rough shape, ipods, SIRIUS and XM are picking off the most valuable listeners (from a demographics perspective) and are growing fast.

Another benefit to advertisers on SIRIUS and XM is that they can get an accurate count of who is listening. The terrestrial radio broadcasters can only use sampling techniques that can have significant bias in order to estimate their audience.

Google has led the way in making the results of advertising more transparent. I believe that will have a ripple-effect through the rest of the advertising world as advertisers learn to expect accountability and no longer satisfied with wishy-washy estimates of audience participation.

Things are heating up in the world or Sirius Satellite Radio receivers. There is now a possibility of 2 new portable units being available by the end of 2006. You may already be aware of the Live Portable model sl100tk1 that has been announced and now there is talk of another unit being made by Hummax, which is the company that produced the S50. Only time will tell if either of these units comes to the market, but in the mean time, you can email us at sales@tss-radio.com and we will email you any new info about these units as it becomes available.

While we are on the subject of portable SIRIUS, we have begun carrying headphones by V-Moda as replacements for the stock SIRIUS S50 Headphones. I figured it would be a good idea to give them a listen to see how they compare to the original S50 stock “ear bud” style headphone.

I am not a big fan of traditional ear bud style headphone because they never fit in my ears correctly and fall out while I am walking. When we received the V-Moda headphones, I was immediately drawn to the Bass Freq model due to the rubber in ear style of the ear buds. They have a small silicon ear bud that fits directly in to your ear that I found fit much snugger and more comfortably than the original S50 or for that matter any other ear bud I had ever tried.

I did a head to head with my original S50 headphones listening to some of the songs I had recorded off of SIRIUS. The first thing I noticed was a substantial difference in the stereo imaging of the V-modas and the S50 stock headphones. The Stock S50 headphones sound mono to me. It is very hard to place were an instrument is coming from in the stereo feild. The V-Moda Bass Freq have a nice wide open stereo image that add a more natural dimension to the music.

I found that the Bass Freq headphones had a much cleaner, more natural sound. The S50 Stock headphones sound compressed and have an almost FM radio exaggerated sound where as the bass freq headphones have a much cleaner crisper open sound. The S50 stock headphones sound more superficially loud, but the bass freq really has a much more pleasant clean sound. The big question is “how was the bass?” Considering that V-moda named these “Bass Freq”. Compared to the original S50 headphones that sounded mushy and undefined in the mids and lows, the V-Moda has a nicely defined sound where all frequencies can be heard loud and clear. The bass is tight and natural in the Bass Freqs. I do have to say that these may not satisfy any one who is looking for the kind of head shaking bass that a large, over the ear headphones can supply but they are worlds better sounding the original S50 phones IMHO.

I hope everyone out there had a terrific 4th! The illegal fireworks here in Chicago were like nothing I have ever seen. It sounded like a war was going on…Anyway, I posted a banner on the front page of TSS-Radio.com the other day about the new Sirius Live Portable after seeing Mel Karmazin, CEO of Sirius flash one at the at the Convergence 2.0 Conference. This has already caused some confusion, and I just wanted to clear it up. We put up this banner to encourage people to email us so that we could keep them informed of new information as it becomes available, not so that people could “pre order” this unit that may or may not be available this year. Unfortunately our website shows any item that is not currently available as some thing that can be pre ordered. This is not the case, although we will order enough of the Live Portable when it does come out so that anyone who has sent us email will be able to get one.

Now, what you really want to know is what do we actually know about this Live Portable unit? Well we know that it may be out AROUND August and that the projects name has been changed from Belagio to Stiletto. Also, we know that the working model number is SL100TK1. That is just about all we got for now, but if you email us, we will let you know more when we do. On another note, if anything on TSS-Radio.com says it is on backorder, say like the Outdoor Home Antenna, you can email us at sales@tss-radio.com and we will email you as soon as we receive more!