The Motley Fool Discussion Boards

Previous Page

Stocks S / Sirius XM Radio


Subject:  Re: Tulips for sale † Date:  2/17/2005  3:05 AM
Author:  psychoinvest Number:  3999 of 10889

After hearing about this topic on another board, I had to take a looksee and see what it's all about.

I hear an analyst has determined that ad revenue could be upwards of $1000/subscription. I dont mean to be rude, but does this makes any sense to you? Lets say the avareage listener makes $50/year. Now lets say that that after taxes and housing, they have 30% of that as discetionary income to spend on what ever gets advertised. That comes out to 6%, wich sounds good at first. Thats $1K spent for $15K in sales that may go to them, their competitor or no one. So I gues you need a ratio for affectiveness of the ad. So lets say it works 25% of the time. Now we are up to 24% of the revenues spent on ads. But we aren't done yet. Those same customers are spending ad dollars in over the air TV, sat TV, internet, newsprint. So now lets say that all of those SIRI subscribers are also getting satalite TV or some other media and watch the same ad they listen to on the radio. So now we are up to 50% of revenue spent on advertising. Sounds wayyyy high to me.

Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us