Hits & Misses
(Business 2.0) -- [HIT] Getting Sirius. Everyone from the competition to the media to Wall Street ridiculed Sirius Satellite Radio for spending $500 million to land Howard Stern--but the King of All Fart Jokes seems to be paying his freight quite nicely. Since Stern's January debut, Sirius's listener base has been rapidly expanding, with its 600,000 net new subscribers last quarter topping analysts' estimates and besting the growth of competitor XM by 50 percent. Bridge Ratings estimates that Stern has driven about a quarter of the growth, with 1.4 million of his fans having signed up so far. Sirius now has a gross retail market share of 55 percent, and by year-end it expects to have significantly closed its subscriber gap, with 6.3 million users to about 8 million for XM.
[MISS] Error on the play. When it comes to building a multimedia empire, ESPN is a Hall of Famer. But even Willie Mays dropped a pop-up now and then. Despite the relentless touting of its new mobile-phone service via promos on its cable network, ads in its magazine, and streaming video that automatically greets visitors to its website, sign-ups for ESPN's sports-optimized phones have fallen far short of projections. In July, Merrill Lynch analyst Jessica Reif Cohen called for parent company Disney to "pull the plug," calling the phone service "a relatively unattractive business" that could lose up to $80 million and lure only 30,000 subscribers this year, a fraction of the 240,000 she'd once predicted. Disney CEO Bob Iger has conceded that initial results have been lower than hoped but talked of plans to expand the phones' retail presence and revamp the pricing structure, saying "the jury is still out."
[HIT] The Ambassador of Freeschwagistan. So what's a better way to launch a new mobile-phone network? Toss handsets into the blogosphere like rocks at a beehive and wait for the ensuing buzz. That's what Sprint Nextel did with its new Power Vision service, which offers live TV, multiplayer games, and, yes, customized sports updates. In January the company began offering free phones and service to select bloggers under a "Sprint ambassadors" program. About 400 signed up, and most ultimately offered praise. "It's pretty cool," blogged RSS creator Dave Winer. "It does EVDO and it works." Soon the commentary turned to promo-blogging itself. "If the brave new world of viral marketing means more free stuff for me, I'm all for it," wrote D.C. blogger Rob Goodspeed. The word does seem to be getting out: By August a Google search of "Sprint Power Vision" turned up 4 million hits, and Sprint reports that nearly 1.2 million users have signed up since the launch in November.
[MISS] What were the odds of that? The online gambling industry--which rakes in billions from U.S. bettors via companies traded on the London Stock Exchange--rolled snake eyes in July. David Carruthers, CEO of U.K.-based BetOnSports, was arrested during a layover in Dallas en route to his company's facilities in Costa Rica. Carruthers and 10 of his colleagues were hit with a 22-count indictment including fraud and racketeering charges; the feds also got a restraining order preventing the firm from accepting Americans' wagers. News of the arrest, which came just six days after the House of Representatives approved a bill banning the use of credit cards to fund betting accounts, spooked investors in London: BetOnSports stock immediately fell 17 percent, helping to spur a decline in Britain's bellwether FTSE 100 index.
[HIT] Oil rush. The price of crude isn't the only thing rising. Sikorsky Aircraft, best known as a top supplier of military helicopters, has seen its commercial business take off as more choppers are needed to ferry workers to offshore oil rigs. The company's civilian sales are on pace to soar to about 60 deliveries this year, a sixfold increase since 2002, with about two-thirds of the growth driven by the oil industry. "Every drilling unit that can work is, in effect, working now," says Tom Marsh of Houston-based ODS Petrodata. Beyond sales, Sikorsky stands to benefit from increased maintenance revenue, as some busy offshore operators have been flying its latest-model S-92 civilian helicopters more than 40 hours per week.To send a letter to the editor about this story, click here.