« Home | Keith Olbermann Puts The Biscuit In The Basket Sup... »
Subscription sales cooling for Satellite Radio?
Labels: Radio
Hot on the heels of Sirius Satellite Radio's new gizmos released last week -- including Howard Stern plugging on YouTube the recordable on-the-go "Stiletto" -- and reports that regular radio's streaming broadcasts over the Internet are picking up more listeners, have subscription sales for satellite radio reached a peak?
How well can both systems keep bringing on new subscribers and replace users who choose not to renew?
For the past 12-months, Sirius Radio has grown faster than XM Radio and closing in on XM's lead. Wall Street likes seeing gains in customer and market share. Recent indicators, though, suggest that growth pace is slowing down, now that the "Howard Stern" effect on sales has stabilized.
Sirius added 441,101 new subscribers in the 3Q while XM added 285,000 subscribers -- meaning 61 percent of new satellite radio subscribers went to Sirius.
Big hopes are still in place for the all-important 4th quarter holiday shopping season.
At last report, XM had just over 7.2 million subscribers while Sirius had 4.7 million (with some questioning "active" and "inactive" subscription classifications, such as "car lot subscribers"). 3rd quarter results announced 10/4 state Sirius increased to 5.1 million subscribers while XM remained relatively flat at 7.2 million -- much larger than a year ago but slower growth from this year's 1st and 2nd quarter sub gains.
Now, there's a report indictating that 3 out of 10 subscribers "very likely" may not renew while overall retail levels of satellite devices is dropping.
Last month at the annual Fall NAB conference in Dallas, the Executive SuperSession paneled by many top terrestrial radio leaders showed them more confident than in years past when asked about digital/new media threats such as satellite radio. Some of that confidence comes from the trends they are seeing in market research work.
Meanwhile, a new J.P. Morgan report says AM and FM radio stations are growing on the Internet, "experiencing a 5% sequential increase in unique visitors to their websites" in August 2006, while Internet-only operators were down 3.5%. Today, terrestrial radio's share of unique visitors to Internet radio is now one-third of all Internet radio broadcasts (32%) - up significantly from 18% a year ago (July 2005).
All of this makes for new media trend pressures for satellite radio as it seeks its next wave of growth.
Reading in AllAccess.com:The latest Bridge Ratings study of satellite radio subscribers calls the retail market for receivers "sluggish" and notes that sales have been light enough in recent weeks that the company has had to use more locations nationwide to achieve its target sample of 4,000 respondents.
Sales are off 29% from Labor Day weekend and were flat week-to-week last week after a 16% dive the week before. In addition, the survey found Sirius' retail lead softening, with its share at 54% after spending much of the summer above 60%, and sales highest among adults 25-54, with 18-21s interested but resisting due to cost.
Analyzing churn rates, 30% retail buyers said they would not renew their subscriptions when they expire and 15% were undecided, but 48% of OEM car radio subscribers would not resubscribe with 10% undecided. And the percentage of people saying they subscribed because of Howard Stern has dropped back to the 18% level after peaking at 38% on Labor Day, with Bridge estimating that Sirius added about 1.46 million subscribers as a result of Stern.
As a result of recent numbers, Bridge has reduced its projections to predict 7.9 million XM subscribers and 6.5 million for Sirius at the end of the year, and warns that if fourth quarter disappoints, the estimates may be high.
posted by Unknown @ Monday, October 02, 2006,
2 Comments:
-
At 5:44 PM,
said...
-
Seems plausible. I dropped XM after using it for almost five years. The music channels are appealing, but ... meh, not $13 a month appealing. With an iPod, I've always got an hour or six of fresh podcasts queued up.
The ads, while less frequent, were more annoying. Quack impotence cures and get-rich-quick schemes are intrusive and take away what value the medium had.
I was a big enthusiast of sat-radio, even back when they were still using the name "CD Radio". Hate to see that much money get sunk into something, only to find out that it's not really that exciting.
I know it's technically not likely, but the ability to skip back to the beginning of something I just tuned into, that sounds interesting, would add more appeal. -
At 4:40 AM,
mcx said...
-
This comment has been removed by the author.
