As part of Bridge Ratings' on-going study of audience attrition of traditional radio and subscriber and user growth of alternative digital media, included here is an update to our findings first published in March of 2005 and then again in December of 2005..

While initial estimates showed solid growth for satellite radio during 2005, data updated through Septebmer 2006 indicates continued slowing growth pattern for the foreseeable future. Presently our guidance indicates XM will reach 7.7 million in subscribers by year end - up 28% over the company's 2005 year-end number.

Meanwhile, Sirius satellite radio made tremendous strides during 2006 due to significant leverage from the addition of Howard Stern, Martha Stewart and sports franchises along with strong marketing and word-of-mouth. At the start of 2005 the satellite service registered 1 million subscribers. That number is pacing to climb to approximately 6.0 million at the close of 2006 for a total sector subscriber count of 13.3 million. However, subscriber projections based on Q3 guidance and consumer interviews will show marked slowing compared to initial estimates made by the industry at the beginning of 2006.

We have revised our projections and graphed the results to see just where all this shakes out.

	2005	2006	2007	2008	2009	2010	2015	2020
XM	4.30	6.00	7.70	9.63	11.93	14.10	18.47	22.53
Sirius	2.00	3.10	5.91	9.17	12.53	15.03	21.34	27.75
Internet Radio	56.70	72.01	91.45	116.14	147.50	187.33	196.69	226.20
Wireless Internet	5.67	18.10	41.15	69.68	110.63	159.23	178.34	205.09
Mobile phone Streaming	0.00	1.475	3.66	6.97	11.81	20.61	23.70	27.26
HD Radio (Terrestrial)	0.100	0.256	1.05	2.00	4.21	8.84	15.99	25.91
Terrestrial Radio Cume	283.10	279.65	282.84	279.97	278.59	262.57	248.33	235.03
Podcasting	1.01	1.49	2.87	3.09	3.68	3.95	6.75	8.17
*Weekly Persons Using Medium in millions

How to read: Bridge Ratings estimates that by the start of 2007, XM satellite radio will have 7.7 million subscribers and SiriusZ
will have 5.91 million.

Estimates represent numbers on 1/01 of year indicated.
Estimates for Internet radio represent monthly users.

Return

Because our predictive polling cannot foresee changes in the technological and sociological environment, the figures included herein do not take these into consideration. Traditional analog radio, even with advances aligned with High Definition technology, may sustain popular use - especially among older listeners. This, of course, relies on quality of the programming. Even so, the above graph for terrestrial radio would seem to defy logic. Though we are projecting that weekly cume for analog radio will slide from its current 95% to 70% by 2020, population growth must also be considered as the U.S. population reaches 336 million* by 2020.

The compiled data indicates that at this point in time, projected subscribers to satellite radio should reach 28 million by 2010 (9.0% of Americans) and 50 million by 2020. However, we are now also projecting HD Radio's growth and though very small market penetration currently exists (256,000 by year end), best efforts to project have HD improving to just 26 million by 2020. This number is significantly lower than our Q1 advisement due to studies done during the second and third quarters which suggest adoption by middle America will take longer than previously suspected. The advent of HD radio and increasing growth of Internet radio will slow original growth projections for satellite radio. Internet radio will greatly benefit from pervasive Wi-Max or Wide Area Wireless Access which will bring Internet Radio to portable devices, including car radios by 2008 or 2009.

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. We 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.

According to this updated data, the entire spectrum of digital audio alternatives, and especially Internet radio and its wireless distribution continue to represent the biggest challenge to traditional radio.

Sample size: 3275 persons 18+ Survey dates: 7/03/06 - 9/30/06

Markets included: Los Angeles, Portland OR, Dallas, Phoenix, New York, Boston, Washington DC, Miami-Ft. Lauderdale, Burlington VT, Denver.

Methodology: Random digit phone dialing, mall intercepts

Population estimates courtesy of the U.S. Census Bureau