Thursday, March 16, 2006

Satellite Radio Does Not Impress the Masses

Only 3% of those interviewed by Bridge Ratings last month indicated they were "Very likely" or "Somewhat likely" to subscribe to one or both of the services this year. This projects to approximately 8 million new satellite subscribers bringing the current subscriber count to 17 million by year-end.

Dave Van Dyke and his team are reaching some fascinating conclusions:

* Internet radio streaming is already the source of preference among young Americans for supplemental audio entertainment and it will continue its growth as more users are equipped with broadband technology.

* While the wireless solution for in-car Internet radio still needs to be determined, its potential for use by the public at large is far greater than the current impressive growth projections for satellite radio. The question that begs to be answered is: "As Internet radio use accelerates both in and out of home, how will satellite radio's profitability model survive?"

The key here is this: with Internet radio already the preferred medium over satellite radio, traditional radio and the moderate growth of High Definition terrestrial radio (HD) should benefit from additional free channels and the refinement of its analog product. Bridge Ratings' analysts "still believe that terrestrial radio will have significant market penetration well into the future with at least 80% of the U.S. population tuning in at least once a week by 2020. Difficult to project with confidence at this time is terrestrial radio's time-spent-listening fifteen years hence."

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