Customer LifeHave been reading through this company's financials and one thing struck me as particularly odd. That the amortization period for the activation fee new customers pay is 20 months, based on historical customer data. Which means, on average, customers leave after 20 months. So basically a person buys a car, get's the SiriusXM on discount for a 1-3 month period, becomes a customer and then leaves.
Has anyone seen any better or other data from the company on average customer life? You can't really get any sense for this based on the way they report self-pay/promo changes each period. Would really like to know the size of that core base of customers.
The company basically relies on the auto co's for distribution so can continously report subscriber growth so long as new cars are being sold with people who haven't been exposed to the SiriusXM product. But at some point in time, after however many years, they can't keep growing the business this way because that Customer A who bought a car 5 years ago, tried Sirius out for 20 months, then cancelled, isn't going to bother with his next new car purchase.
Interested in any thoughts.