Full Text:

Since the merger, Sirius XM radio has been struggling. They are a few months away from having to pay down over $1 billion in debt in 2009, while the prospects of new subscribers and income is dwindling. Wall Street is pessimistic and are cutting new subscriber forecasts by 50,000, which would be a 51% smaller increase from the same period last year. The fall of auto sales is also a big problem because half of current Sirius XM customers and 80% of new subscribers get their satellite radios when they bought new cars. The music industry has even a bigger stake in this dilemma because they not receive a percentage from the adjusted gross earnings from performance royalties for sound recordings. It is currently 6% and will raise a half a percentage until 2012 when it is 8%. This revenue for the industry will take a serious hit if satellite radio goes under. Sirius XM is hoping to offset this by placing the radios in more cars than before, as they are now in 90% of Mercedes-Benz vehicles. This has caused their stock price has hit record lows and prompted lawsuits from investors to remove the CEO. It was $3.94 last year and is currently at around 30 to 20 cents. If successful, satellite radio could be very useful for bringing in additional revenue for the music industry, but don't get your hopes up quite yet.