Sirius Has a Supply Chain Problem
I've been following Howard's comments about the lack of availability of Sirius (NasdaqNM:SIRI) radio receivers anywhere in the New York area. I've actually been surprised.
I've been working on a few small projects here and as a result I've been spending way too much time at Radio Shack (NYSE:RSH), Fry's Electronics and even Best Buy (NYSE:BBY)in the past few days. What I've seen is that the shortages of Sirius receivers that existed over Christmas and into early January are now mostly gone. Not everybody has everything in stock and the highly-touted recording S50 model is almost impossible to find, but if you wanted Sirius tomorrow, you wouldn't have a problem getting it in the LA area.
In Salt Lake City a couple of weeks ago, the stock was even better. No shortages up there.
It seems that Sirius must have hired Michael "Great Job Brownie" Brown away from FEMA, and now have him managing their supply chain. Stuff is going to where it's not needed, and is unavailable where there is tremendous demand.
This is just one example of many things Sirius is not doing all that well, as it is experiencing fantastic subscriber growth and -- perhaps without even knowing it -- a change in what it is and where it's money comes from.
A few conclusions are very obvious:
- The demand for Sirius receivers seems to be concentrated in the northeast, with LA and a few other major cities being secondary areas of demand. My own limited observations of retailers suggest that smaller cities and rural areas have not experienced the rush to buy these satellite receivers, even though they are also the areas that are least well-served by terrestrial radio.
- All the areas where Sirius receivers are partially or completely sold out are areas where Howard Stern has had a long-standing strong presence. Like it or not, Howard is driving the sales.
- Sirius is well behind the curve in dealing with this phenomenon, just as they're behind the curve with regards to demand for webcasting, for better satellite reception and (ultimately) for internet-only subscription demands, which is where this is going next.
More on what they need to be doing later.
For now, they just need to start trucking radios from the west to the Northeast. They're losing subsciption dollars in the meantime.
-btc



