Some comparisons between StreamTrack and Sirius, and a sea change within the radio broadcast industry...
I'd like to begin by stating that I'm not here to minimize the success of Sirius, as I happen to be a long-time and loyal shareholder. As a matter of fact, when they were deep in debt and on the verge of bankruptcy (in early 2009), I accumulated a substantial holding below a dime a share. It has turned out to be one of my best investments ever, and has turned out to be a great turn-around story as well. Sirius (although demonstrating improving metrics) was deeply in debt (and nearing bankruptcy) before their massive turnaround. StreamTrack, based upon the balance sheet, is similarly experiencing significant financial challenges as they seek to accelerate their registered listener growth rate.
Here's an interesting fact that many are not aware of. In 2004, Sirius only had about 700 thousand total subscribers (about 5x of StreamTrack's registered users). In that same year, they signed legendary broadcaster Howard Stern (which some characterized as an act of desperation, others as an act of genius). As a result, in the next 24 months, they grew their subscriber base to about 6 million (from 700k two years earlier). And now there total subscriber count is nearing 30 million. So a one-time almost defunct company, is now worth nearly $20 billion. And while Howard undoubtedly had alot to do with bringing on many of those subscribers, I believe that the vast majority were a direct result of the traction that satellite radio has obtained, as a widely accepted broadcast medium.
Similarly, Pandora has seen a growth of their registered users from about 10 million to more than 80 million from early 2009 to late 2011. This would seem to indicate that internet radio has been gaining traction and growing in a similar trajectory to satellite radio.
So how does all of this relate to StreamTrack? Clearly, with only about 147 thousand registered members, StreamTrack has a very long way to go. But as with the examples above, the numbers can begin to grow exponentially in a heartbeat. I refer in particular to the subscriber growth that Sirius experienced (from 700k to more than 6 million, in a period of about 2 years) that I mentioned above.
One of the things I think StreamTrack has in their favor is more than 5,000 radio stations to choose from (and growing weekly), whereas offerings like Sirius have less than 200 channels. Obviously the quality of the content is not equal (Sirius has whole lot of top-tier talk talent), but that can change with time. Just look at how the podcast space has grown to see that there has been a migration from traditional over-the-airwaves delivery to internet delivery.
And one other thing to consider - offerings such as those from StreamTrack have the advantage that unlike Sirius, which costs the average user about $15 per month, StreamTrack is absolutely free to the user.
It wouldn't surprise me if when StreamTrack reports the results of their most recent quarter ended Nov '13 (expected to be released within the next couple of weeks), we see a significant growth in their user base, along with a corresponding increase in their total revenue.
As always, simply my opinion.
STTK
