Monday November 9, 2009
Bridge Ratings has been tracking a number of parameters related to consumption and perception of satellite radio since the subscription radio business came on the scene in the early 2000's.
The chart below trends consumer interest in satellite radio. It reflects total actual subscribers (XM and Sirius) back to 2003. It also trends the potential levels of subscriptions based on interviews done each year with consumers who had both subscribed and had expected to subscribe.
In 2003, when the product was new and satellite radio marketing was at its height Bridge Ratings projected a total potential subscription base of more than 50 million subscribers.
Over time while actual subscriptions grew, consumer interest began to soften. Based on new consumer studies during 2009, we expect satellite radio's potential to be about half of that 2003 number.
Actual satellite radio subscriptions have flattened since 2008 coinciding with the merger of XM and Sirius along with the negative fluxuations of the economy.
Product growth is tied to consumer interest and the following chart shows Brand Stimulation Scores for subscription radio by quarter since 2006.
Bridge Ratings' Brand Stimulation Scores are derived by identifying consumer passion about a product or service. Generally, upon introduction of a well-marketed product or service which meets or exceeds consumer expectation and/or need, its Brand Stimulation Score sits at the highest levels of the 10 point scale.
In January of 2006, satellite radio's Brand Stimulation Score was 8.2. Comparatively, Apple's iPhone's BSS was 9.1 at its launch in 2007.
Brand Stimulation Scores closely mirror consumer interest and based on these findings of our on-going analysis of satellite radio, product interest has settled into the 4.0 range which should yield a projected Q4 2009 sales improvement of about one percent or 185,000 subscriptions over the four month period October 2009 thru January 2010.
We do not anticipate a significant recovery or return to the sector's former consumer passion levels at this time based on current economic conditions, subscription costs and product offerings.
In fact, of those satellite radio consumers who have been subscribers two or more years, "Very Satisfactied" scores have fallen from 2005's 63% to 46% in October 2009.
On-going Consumer Study of satellite radio
Sample size: 4252 satellite radio listeners 18+
Consumer markets: Portland, OR, Los Angeles, CA, St. Louis, MO, Dallas, TX, Chicago, IL, Des Moines, IA, Boston, MA, Jacksonville, FL