For
Immediate Release:
Updated Wednesday June 28, 2006
Bridge Ratings Projects: Though XM Re-gains Momentum - Sat Sales Slowing
Bridge Ratings' trending of Satellite Radio subscribers
continues through 2006. The purpose of this on-going study
is to analyze consumer preferences related to satellite service brand
and satellite radio in general.
Bridge Ratings interviews consumers at retail outlets
who have purchased Satellite radio. In the early phases of these
interviews, brand loyalty was not a major purchase factor. Some programming
for each satcaster appealed to individual shoppers
but there was little overall brand impact on the purchase decision. This
has changed in recent weeks. Programming options and equipment style
and benefits are taking a stronger position as the impetus for the purchase decision
with Sirius more consistently being sited for its programming and
equipment as motives for purchase.
Bridge Ratings projects actual subscription pacing
on a weekly basis and the chart below shows satellite radio's
weekly sub counts as
projected through our in-store interviews. These projections do not take
into account auto dealership sales which accounted for
approximately 13% of total subscribers in Q4 2005 and 25% in Q1 2006.
Our projected nine week cumulative total for satellite radio
subscriber
trends
is shown in the chart below:
Q2 trending of projected retail sales looks like this through the week ending
June 19, 2006
XM: 767.555
Sirius: 719,577
Q2 Projected Total: 1,487,132
Bridge Ratings projects that since the week of March 3, 2006 1,942,840 additional subscriptions to satellite radio have
occurred at the
retail level. XM's share of this 17 week projected retail sales total is 51%, Sirius 49%. Trends indicate XM gaining momentum.
Based on slower retail sales trends over the last several weeks, Bridge Ratings now projects XM total subscriber count at 8.4 million by year end 2006
and 6.3 million for Sirius.
Projections are updated quarterly. As of this date, Bridge Ratings estimates that original projections of the increase in
total 2006 satellite subscriptions of 6 million is now 5.5 million - down 8% from original projections. Due to the nature of the satellite radio retail
sector, these estimates are likely to change by year-end.
The Stern Effect
The "Stern-Effect" seen during Bridge
Ratings' satellite research trends of 2005's fourth quarter and into the
first quarter
of '06, continues to be less of a factor this quarter. Our latest estimate is that a total of
1.35 million (11%) of Stern's terrestrial fan base has
migrated to Sirius. As Bridge Ratings continues to interview former Stern
listeners, there is an apparent apathy regarding
future Sirius subscriptions. When asked "why haven't you yet subscribed
to Sirius satellite radio?",
the following responses were given by 3200
Stern listeners 18+ between
April 1 and June 19, 2006:
| 1, |
Listening to a morning show that was my second choice before |
25% |
| 2. |
Equipment and monthly costs too high |
21% |
3. |
Don't see the value of satellite radio |
20% |
4 . |
Found a new station to listen to |
16% |
5. |
Don't miss Howard Stern enough to subscribe |
8% |
6. |
Don't listen to morning radio right now |
6% |
7.. |
Don't Know |
4% |
This week the response "I Don't miss Howard Stern enough to subscribe" continues to generate fewer mentions as the "Stern effect" reaches a
minimum effect point. Stern's
impact on the satellite radio subscription model continues to weaken in an environment of less mass marketing, however
in interviews with potential Stern subscribers the
recent acquisition by Sirius of Stern's archived shows from CBS will spark some "fence-sitters" to finally subscribe. At this point, Bridge Ratings is projecting an additional million subscribers by the end of Q1 2007 due to Stern's programming being offered via streaming.
"Now that Howard Stern is streaming his Sirius radio program on the Internet, how likely are you to subscribe?"
| |
Very Likely |
Somewhat likely |
Not likely |
| Total Non-Subs |
4% |
9% |
77% |
"Equipment
and subscription cost" and "Listening to a morning show that was my second choice before. These results lead us to believe that the absence of Stern on mainstream media and the lack
of the continuing marketing that he enjoyed through 2005 and early 2006, is affecting the "Stern affect". Interestingly, despite of this slowdown in
subscriptions directly attributed to Howard Stern, Sirius continues to show strong retail strength based on other significant content benefits, most
notably the quality of their music programming and their sports package.The NBA package has been mentioned more frequently in recent weeks - no doubt attributed to the NBA playoff and finals broadcasts. Major League Baseball is also beginning to show steady responses as an XM magnet.
Stern as a marketing pillar solidified the Sirius market position and regardless of fewer Stern fans migrating to satellite, he is likely
stimulating market awareness of Sirius. However, while market awareness for Sirius is high, general retail sales for satellite radio in general have been softening this quarter as demonstrated by the chart below.
This week gains brand conversion momentum:
"Which Satellite Radio Service did you purchase today?"
| Wk of: |
6/26 |
6/19 |
6/12 |
6/05 |
5/29 |
5/22 |
5/15 |
5/08 |
5/01 |
4/24 |
4/17 |
4/10 |
4/03 |
3/27 |
3/20 |
3/13 |
3/06 |
| XM Radio |
55% |
52% |
45% |
55% |
40% |
43% |
45% |
58% |
60% |
57% |
52% |
60% |
48% |
44% |
45% |
50% |
45% |
| Sirius |
45% |
48% |
55% |
45% |
60% |
57% |
55% |
42% |
40% |
43% |
48% |
40% |
52% |
56% |
55% |
50% |
55% |
Among these consumers, this week subscribers to XM continued to have a higher degree of "purchase by brand" preference,
i.e., consumers were shopping specifically for XM prior to the purchase for the second week running. When asked "Can you name a satellite radio company",
consumers responded as follows prior to their purchase:
"Can you name a satellite radio service?"
| Wk of: |
6/26 |
6/19 |
6/12 |
6/05 |
5/29 |
5/22 |
5/15 |
5/8 |
5/01 |
4/24 |
4/17 |
4/10 |
4/03 |
3/27 |
3/20 |
3/13 |
3/06 |
2/27 |
| XM Radio |
47% |
48% |
52% |
55% |
48% |
46% |
49% |
52% |
55% |
59% |
46% |
55% |
55% |
44% |
52% |
60% |
55% |
65% |
| Sirius |
53% |
52% |
48% |
45% |
52% |
54% |
51% |
48% |
45% |
41% |
54% |
45% |
45% |
55% |
48% |
40% |
45% |
35% |
This Week's Satellite Radio Consumer Index: Branding vs. Purchase
| XM |
1.17 |
| Sirius |
.85 |
The above table measures strength of brand against actual retail purchase. This week's interviews revealed that 55% of
retail consumers purchased XM satellite radio systems while 47% mentioned the XM brand prior to the purchase. The index of purchase
to brand awareness indicates that 47% of potential satellite radio shoppers interviewed this week were able to name XM Radio, but 55% of those consumers
actually purchased an XM system - an 8% positive differential. Some aspect of the purchase process converted an additional 8% of shoppers to XM this week. This week's Consumer Index numbers reflect the first time in several weeks in which XM's conversion exceeded 1.0.
The variable may have been price, equipment feature preference, programming preference - any number of issues that were presented to the consumer at point of
purchase. Trending over the past three weeks shows brand awareness growing for Sirius. After several weeks of moderate success at converting lower brand awareness to actual retail sales, the two satcoms appear to be back to parity. We suspect this type of behavior will continue throughout the year.
Consumer purchase motive for each service.
Q: "What was the primary reason you purchased
a satellite radio system today?"
% Of Subscriptions Due to .....
| Week |
Programming Variety - XM |
Programming
Variety - Sirius |
No Commercials - XM |
No Commercials - Sirius |
Sports Package - XM |
Sports Package - Sirius |
Personalities - XM |
Personalities - Sirius |
| 1/02/06 |
15 |
9 |
25 |
24 |
5 |
- |
3 |
6 |
| 1/09/06 |
17 |
18 |
22 |
29 |
5 |
2 |
5 |
9 |
| 1/16/06 |
21 |
20 |
24 |
32 |
6 |
2 |
5 |
6 |
| 1/23/06 |
18 |
22 |
20 |
34 |
5 |
3 |
4 |
10 |
| 1/30/06 |
20 |
19 |
25 |
30 |
8 |
9 |
3 |
12 |
| 2/06/06 |
25 |
20 |
30 |
25 |
10 |
12 |
5 |
10 |
| 2/13/06 |
15 |
22 |
27 |
30 |
8 |
4 |
6 |
10 |
| 2/20/06 |
12 |
30 |
25 |
27 |
7 |
5 |
4 |
8 |
| 2/27/06 |
13 |
34 |
20 |
25 |
10 |
5 |
5 |
12 |
| 3/06/06 |
20 |
25 |
25 |
29 |
10 |
8 |
5 |
13 |
| 3/13/06 |
22 |
28 |
30 |
27 |
12 |
10 |
4 |
15 |
| 3/20/06 |
25 |
30 |
28 |
32 |
10 |
10 |
6 |
15 |
| 3/27/06 |
30 |
36 |
25 |
30 |
15 |
10 |
7 |
13 |
| 4/03/06 |
30 |
33 |
30 |
25 |
20 |
15 |
5 |
15 |
| 4/10/06 |
35 |
30 |
32 |
25 |
15 |
10 |
4 |
10 |
| 4/17/06 |
30 |
36 |
28 |
35 |
15 |
15 |
5 |
10 |
| 4/24/06 |
38 |
29 |
30 |
37 |
20 |
15 |
8 |
12 |
| 5/01/06 |
40 |
30 |
33 |
35 |
22 |
20 |
10 |
10 |
| 5/08/06 |
42 |
30 |
30 |
33 |
20 |
28 |
10 |
15 |
| 5/15/06 |
35 |
39 |
24 |
25 |
15 |
22 |
5 |
20 |
| 5/22/06 |
32 |
40 |
20 |
22 |
15 |
20 |
7 |
18 |
| 5/29/06 |
34 |
38 |
18 |
21 |
10 |
15 |
8 |
15 |
| 6/05/06 |
30 |
36 |
15 |
20 |
12 |
15 |
10 |
20 |
| 6 /12/06 |
32 |
35 |
13 |
20 |
13 |
22 |
12 |
22 |
| 6/19/06 |
35 |
35 |
15 |
18 |
12 |
20 |
15 |
20 |
| 6/26/06 |
37 |
34 |
13 |
15 |
15 |
20 |
13 |
22 |
- Hardware capabilities & features - 7%
- Hardware appearance - 6%
- Hardware pricing - 9%
- Major League Baseball - 5%
In the month of July, Bridge Ratings will release
its full second quarter tracking for this sector. Those results
will reflect these same consumers' opinions after
a period
of time using the satellite service they chose.
*Based on interviews conducted
at retail outlets between January 1 and June 26, 2006.
Markets surveyed: Los Angeles, San
Diego, Phoenix, Boston, Detroit, New York, Boston. 4000 weekly
listeners 18+.
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