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 July 2006 indicates a continued
positive but slowing growth pattern for the foreseeable future. Presently
our guidance indicates XM will reach 8.2 million in subscribers
by year end - up 37% over the company's 2005 year-end number.
Meanwhile, Sirius satellite radio has made significant strides since fall of 2005 now garnering between 58% and 62% of the share of new satellite subscriptions.
We are now projecting Sirius to climb to over 6.5 million subscribers by
the close of 2006 for a total sector subscriber count of 14.7
million. However, subscriber projections for Q3 guidance and consumer interviews will show marked slowing compared to initial estimates before the satcasters' holiday season 2006 push.
We are also projecting under current consumer brand awareness, product preference and retail and auto sales, Siirus will surpass XM subscriber counts by 2009.
We revise our projections on a quarterly basis:
|Mobile phone Streaming
|HD Radio (Terrestrial)
|*Weekly Persons Using Medium in millions
Estimates represent numbers on 1/01 of year
Estimates for Internet radio represent monthly users.
terrestrial radio to the mix.
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.
The compiled data indicates that at this point in time, projected
subscribers to satellite radio should reach 34 million by
2010 and 60 million by 2020. However, projections for
HD Radio's growth have HD
improving to 26 million by 2020.. 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.
Internet radio streaming is already the source of preference
among young Americans for supplemental audio entertainment and is continuing its growth as broadband
technology penetration rapidly improves through the U.S.
Podcasting is showing slower overall growth than previously projected based on two factors: a) the "innovator"/"early adopter" crowd which jumped on this new technology is splintering. A portion of these consumer groups have slowed their podcast consumption, and b) the percentage of podcast consumers who reported significant on-going weekly use of the medium are now listening to fewer podcasts over the course of a typical month. While it is true that podcasting has pierced the mass appeal membrane and small percentages of "late adopters" are beginning to utilize the medium, this group is much more selective in the podcasts they'll spend time with and thus are downloading fewer per week than their "early-adopter" counterparts.
The awkward process of podcast consumption somewhat retarding the growth of this new medium, i.e., its counter-intuitive user process is preventing more late-adopters from trying this exciting new technology of information consumption. We anticipate that soon technology will be introduced which will further ease the usage process, but until that time occurs, podcast growth will be slower than previously reported.
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: Internet radio is quickly becoming the preferred
medium over satellite radio and, traditional radio among 15-30 year old early adopters. Tthe lackluster projected
growth of High Definition terrestrial radio (HD) suggests by current research that unless additional interactive technology is added and programming and technical problems improve, HD's free channels will do little to fend off other digital audio alternatives to terrestrial radio. 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: 2900 persons 18+ Survey dates: 3/03/06
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
Population estimates courtesy of the U.S. Census