Updated Wednesday September 27, 2006

Retail Maintains Soft Activity

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. Consumers are interviewed when
entering audio departments to determine their purchase intent and then again post-purchase. By matching pre-purchase interest
against actual purchase, we are able to determine: a) brand potency and b) brand awareness-to-purchase effectiveness, i.e. the brand's
ability to convert awareness to purchase. In recent weeks programming options and equipment style and benefits have been
taking a stronger position as the impetus for the purchase decision with Sirius more consistently being sited for its programming
content and equipment as motives for purchase.

This Week's Update:

Satellite radio retail sales continue to show a sluggish environment. Retail activity this week was flat compared to last week's -16% and is off 29% from our Labor Day Weekend statistics.

Bridge Ratings sample goal each week is 4000 persons across the U.S.*. This typically amounts to an average of 100 consumers interviewed per retail location* - 40 locations. In recent weeks however, retail traffic has been lighter and in order to complete our goal of 4000 interviews, we have had to expand the number of locations. Trends in interview completion are worsening. For the week ending September 11 we averaged 92 interviews per location; September 18 that number was down to 89, and this week it was down to 85. Should this trend continue into mid-October, it may very well be appropriate to assume retail interest in satellite radio has waned. As we approach the mid to late part of the fourth quarter when holiday shopping volume kicks in these retail numbers should improve.

Within the softer retail environment, the majority retail share enjoyed by Sirius may be softening as well. The week ending September 11th was the last week Sirius garnered a 60 share or better. Retail share slipped to a 58% share of sales last week and to 54% this week. Youth-demographic interest in satellite radio continues to be a challenge according to our tracking figures.

The largest group of satellite radio retail shoppers continues to be 35-54 year olds with 19% of non-subscribers this week indicating they are considering subscribing in the next six months. Alternatively,18-21 year olds (college age) are beginning to express curiosity and interest though cost is the primary reason more college students do not subscribe. Lack of awareness of the benefits that satellite radio has over terrestrial, internet radio or even traditional radio is another marketing challenge for both satellite companies.

The investment community is also concerned about the apparent bad news ahead for satellite subscriber trends. The analysts are bracing for what could be tough sledding for both satcasters — and terrestrial radio will not view it as bad news. Bank of America’s Jonathan Jacoby concurs with Bridge Ratings' findings and says “poor retail trends and Big Three auto production cuts” make it hard for the car companies to “bail out” XM and Sirius from what look to be weakening subscriber add numbers. What’s more — Jacoby says the number of receivers being sold at retailers “may peak” this year.

XM is expected to add more than 300,000 subscribers in the third quarter — compared to about 450,000 for Sirius. That’s a real turnaround and it’s in favor of Sirius.

Full Year Projections

Based on current pacing results and our continuing in-store interviews, Bridge Ratings has further reduced its projections and now estimates that XM total subscriber count will end the year at 7.9 million and 6.5 million for Sirius. Projections are updated quarterly. As of this date, Bridge Ratings estimates that original industry projections of the increase in total 2006 satellite subscriptions of 6 million will be closer to 5.4 million with Sirius maintaining a 60% share this year with 3.4 million new subscribers compared to XM's 2.0 million. By year's end, satellite radio's 14.4 million subscribers will represent approximately 5% of the U.S. population.

Should the fourth quarter disappoint, these estimates may be high.

Among these consumers, this week brand awareness for the two satellite radio products continues to favor Sirius.

Sirius scored another strong week for satellite system purchases over performing its brand awareness:

This week's interviews shows the two satcasters approaching parity of the "brand vs. purchase index". 53% of those interviewed prior to purchase mentioned "Sirius" by name first when asked if they could name a satellite radio company. The retail purchase percentage of 54% creates a three week downtrend to be watched. In most retail strength of brand studies done by Bridge Ratings, this is highly typical behavior of brand leaders. When this strength of brand builds and maintains at these levels, we have found that it is difficult for brand alternatives to overcome this dominance unless some brand corruption occurs to the leader or retail sales derail due to an intervening public event.

We anticipate that the fourth quarter will be a significantly important one for both companies, but much more so for XM.

Satellite Radio Churn Rate

Bridge Ratings also interviews satellite radio subscribers who have had subscriptions for at least three months. We wanted to learn if these subscribers' intended to re-subscribe at the conclusion of their free trial or at the end of their one year subscription. We also differentiate between in-car (OEM) installs where many of the subscriptions are free upon purchase and retail purchase. Free trials last between three and 12 months.

"Do you intend to renew your satellite radio subscription?"

The Stern Effect

After some retail "lift" from Labor Day Weekend, the "Stern-Effect", a term coined to reflect the subscription growth impact attributed to personality Howard Stern joining Sirius, has slowed once again to levels not seen this year. Interviews with former Stern terrestrial listeners this week indicates that the on-line streaming availability of Stern's satellite show is a lure, but even this has softened. Our latest estimate is that a total of 1.46 million (12%) of Stern's total terrestrial fan base has migrated with him to Sirius.

Bridge Ratings estimates that 2.5 million of Howard Stern's terrestrial audience (20%) were Stern's most loyal listeners and that Stern has converted 50% of them (1.2 million) to join him. Sirius intends to step-up Stern's marketing during the fall quarter in anticipation of the holiday shopping season in an effort to convert more Stern fans to his satellite show. Bridge Ratings views the unconverted 50% of Howard Stern's core fan base as the prime group to pursue as they will be less costly to acquire than the 80% of Stern's terrestrial audience who were categorized as "listened occasionally" or "listened frequently".

This week's Sirius subscriptions as motivated primarily by Howard Stern dipped below 20%.

Based on this data we estimate that approximately 15% of Sirius' third quarter subscriptions were directly linked to Stern.

Consumer purchase motive for each service: Sirius Preferred Programming

The following chart has proven to be an indicator of the future behavior that we see in Brand & Retail Strength chart above.

Q: "As a subscriber to ______satellite radio service, please rate your satisfaction with the following on a scale of 1 to 10 where
"1" represents "Not satisfied at all" and "10" represents "satisfied completely"

 Based on this week's interviews with non-subscribers to satellite radio, but who have told us in the past they intend to subscribe at some time in the future, the following represents our initial retail estimates for the fourth quarter:

Bridge Ratings continues to release updates on our retail interviews through the third quarter.

*Based on interviews conducted at retail outlets between January 1 and September 25, 2006. Retail outlets vary by week but may include Best Buy, Circuit City, Sears, CompUSA, Target, Staples and Sam's Clubs stores.

Markets surveyed: Los Angeles, San Diego, Phoenix, Boston, Detroit, New York, Boston, Chicago, Dallas. 3990 listeners 18+ were surveyed this week.