(More From Katz): Satellite Radio – A Proper Perspective

• It isn’t commercial free, it has virtually no local content and at $10 to $15 per month or more for a subscription, it certainly isn’t free.
• In the 10 years since its launch it has worked its way up to being owned by… 10.6% of the Adults 18+ in the USA
• If 30% penetration is considered “critical mass” for technology products…it has a very, very long way to go to be considered a mass medium. Today, it is irrelevant in that category.
• It reports 20.5 million “subscribers” (includes unsold autos and cancelled subscriptions for 18 months after they cancel). Only about 85% are “self-pay” (or, real). Only 9.5% of Adults 18+ in USA listened to any satellite radio in the past week and only 1.2% plan to acquire one in the coming year.
  
  

• Radio reaches 93.4% of Adults 18+ in the USA every week.
• Radio connects to listeners locally, on many platforms, and then connects those listeners to advertisers.

- Mary Beth Garber/Katz Radio

Sirius XM Is One Of Time's Top Ten Tech Failures

You, hopefully, will indulge me a self-satisfied smile as I pass this along (now let's work hard to adopt multi-platforms to be sure that we're not on this list ourselves in five years!):

Sirius XM (SIRI) satellite radio was supposed to be one of the most successful consumer electronics devices of all time. A subscriber would be able to listen to more than 100 stations coast-to-coast in either a moving vehicle, or using a portable version of the device. Initially, the service planned to run no commercials. One of the two companies that would eventually be the merged Sirius XM was XM Satellite Radio which launched its service in September 2001. At the end of the year, the company had almost 28,000 subscribers, a figure that jumped to about 350,000 by the end of the 2002 and 5.9 million by the end of 2005. Over this period, the company accumulated hundreds of millions of dollars of debt in order to cover capital expenses, operating deficits, and sales and marketing costs. Analysts expected the company to be extremely profitable once it reached subscriber levels of more than 10 million. The business was growing so quickly that this goal seemed a foregone conclusion. Rival Sirius launched its service in July 2002. Over the next five years, it would have fewer subscribers than XM but would grow nearly as fast. Sirius also took on tremendous amounts of debt to support its operations. As both companies ran low on money, they announced a merger on February 17, 2007. The FCC reviewed the request for thirteen months while the companies were bleeding cash. Subscriber growth had slowed, most likely because of new and more popular consumer electronics devices like the Apple iPod and multimedia cellular handsets. Shares in Sirius, which had traded at $63 in 2000, dropped to $.05 earlier this year. In the first quarter of 2009, the number of subscribers for the combined service declined by 400,000 from the previous quarter to 18.6 million. Neither Sirius nor XM ever made a dime. —Douglas A. McIntyre, Time Magazine

Country Does Well In (The First Ever!) Spring ARB Satellite Ratings

Arbitron just released the long-awaited XM and Sirius channel cume and AQH ratings as reported in the Spring 2007 meters and diaries nationally.

The number one music channel on Sirius is Scott Lindy-programmed New Country with a national cume of 455,900 and an average quarter hour audience of 20,400. Two country niches are in XM's top ten music channels, the classic country Willie’s Place (channel 13) ranks #3 and programmer Jon Anthony's new country-formatted Highway 16 is #8. All three channels are commercial-free.

Among the Sirius talk channels NASCAR ranks third, with an average weekly cume of 177,600 and 8,600 listeners in an average quarter hour. The actual races far out rank the pre-race and post-race coverages.

In general, XM's cume is higher than Sirius', but Sirius' average TSL is much higher than XM's, making the AQH ratings closer than you might think they would be, given XM's cume leadership position. If you'd like to see the entire report, contact your ARB rep or drop me an email.

The FCC Says Sirius And XM Do Not Compete With Terrestrial Radio

Ron Chase at Radio OnLine's headline at first made me spit out my coffee.. until I read NAB President David Rehr's reaction quote:

"This FCC decision that the current duopoly of XM and Sirius do not compete with radio, iPods or any other audio sources in the satellite radio market further undermines the arguments made by XM and Sirius to obtain a government-sanctioned monopoly. While the FCC clearly intends to examine all issues surrounding the XM/Sirius merger, the hurdle the parties must overcome to convince the FCC to change direction is very high. This is a dramatic blow to XM/Sirius' presumption of a broader market, and still more evidence that XM and Sirius compete ferociously against each other in the market for nationwide multichannel mobile audio services, and no one else."

"Commercials Are Inevitable"

Eric Morath of the Detroit News got to wondering if the ads starting to appear on XM and Sirius were affecting renewal rates and subscriptions, and his article is very interesting. But, he includes a few quotes that are really relevant to all of us:

1. "What wowed you 15 minutes ago doesn't wow you 15 minutes from now."

2. "As far as adverting, the bottom line is, if thousands or millions come in contact with a new form of media, brands are likely to follow."

3. "A decade or so ago, some basic cable movie channels, such as American Movie Classics (AMC), did not interrupt films with commercials and Internet users read e-mail without sifting through spam. Even terrestrial radio was commercial free at the beginning of the last century, but the Radio Act of 1927 allowed networks to take on advertisers, rather than rely on government support. The commercials, however, don't bother everyone. XM subscriber Matt Nowaczok said he signed up for the wider variety of music and the availability of more news-talk outlets. He said commercials are a minor annoyance compared to how much he enjoys the service."