Even though the royalty rates are set to rise each year, Sirius XM will continue to grow its cash flow on the back of its robust subscriptionbased business model.
Perhaps the real prize Summit Energy offered Schneider was a subscription-based business model that pays on a monthly basis, which is very attractive from a margin and visibility standpoint.
Additionally, a subscription-based business model that relies on stable recurring revenues will decrease the downside risk in a weak spending environment like the one the networking industry finds itself currently in.