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There are numerous myths that surround satellite radio: Sirius and XM. The unprecedented amount of publicity coupled with Wall Street's fascination with this technology has caused these myths to be perceived as truth. Let's separate them:
MYTH: Satellite has a huge number of subscribers.
TRUTH: They have 9 million and that number is overstated because they count radios in unsold cars as subscribers and they keep cancellations on their roster for 18 months. (Their cancellation rate is nearly 2% per month -- 20% per year.)
MYTH: Satellite Radio is doing well financially.
TRUTH: XM & Sirius combined lost over $1 Billion last year and that number is growing. In Q1 2006 Sirius alone lost $5 million per DAY!
MYTH: Automakers are anxious to install satellite radios.
TRUTH: Automakers are paid $150 per satellite radio to install them (the radio itself is given free to the automakers).
MYTH: Satellite is commercial free.
TRUTH: They now carry spots on their talk stations and will be adding them to music soon. But ... a recent survey said that I in 4 subscribers are there because of no commercials!
MYTH: Satellite radio has good fidelity.
TRUTH: Can't get it in tunnels, buildings, bridges, etc. -just like terrestrial radio. It does have static. Satellite actually broadcasts to an existing unused FM frequency on your radio.
MYTH: Howard Stern caused a surge in subscribers.
TRUTH: They projected 25% of his listeners would follow ... only 8% did.
MYTH: Satellite listeners will no longer listen to terrestrial radio.
TRUTH: 2/3rds of satellite's subscribers listen to terrestrial the same amount they used to.
Sources: Arbitron, RAB, Bridge Ratings, Boston Globe, CNN Money, NY Magazine, Jacobs M edia |
