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.
While initial estimates showed solid growth for satellite radio
during 2005, data updated through November 2005 indicates a more
optimistic growth pattern. Presently our guidance indicates XM
will reach just over 6 million in subscribers by year end - up
significantly over 2004.
Sirius satellite radio has made tremendous strides during 2005.
At the start of the year the satellite service registered 1 million
subscribers. That number will climb to approximately 3 million
at the close of 2005 for a total sector subscriber count of 9
This growth coupled with improving program content and compelling
personalities as well as strong marketing and discount campaigns
are driving satellite subscriber projections beyond our original
estimates. We graphed the results to see just where all this
shakes out. You may be surprised. Digital
Audio Market Projections.
The compiled data indicates that at this point in time, projected
subscribers to satellite radio should reach over 50 million by
2010. We still see XM as retaining its 'senior' market share
throughout the growth term.
Meanwhile, Internet radio streaming is already the source of
preference among Americans for supplemental audio entertainment
and it will continue its growth as more users are equipped with
Combine this data with the market penetration potential for
wireless Internet and the picture becomes much clearer. And 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 impressive growth projections being tossed
about for satellite radio. The question that begs to be answered
is: "As Internet radio use accelerates both in and
out of home, will satellite radio's profitability model matter?"
The key here is this: with Internet radio already the preferred
medium over satellite radio, traditional radio should continue
to perfect and refine its product, keep an eye on the alternatives
and not get distracted. In fact, it is clear now after a year-long
study of digital media use by the "next generation",
that traditional radio should further embrace as many of these
technologies as possible to distribute their brands.
According to this updated data, Internet radio and its
wireless distribution continues to represent the biggest challenge
to traditional radio - not satellite radio.
All of the digital options offer more opportunity to siphon
off listening to traditional radio. However, the future of AM/FM
radio use hinges on the industry responding to the challenge
by continuing to reinvent itself. HD radio may not be the answer
to attrition that the industry hopes for. Too much is fluid and
changing now to be confident we can be with these numbers for
the immediate future.
The Internet radio solution will be aggregated in a portable
device, much like an iPod or MP3 player with docking ports in
your car and in every room in your home so it can be heard through
car and home entertainment audio components.
Furthermore, the data supports recent Bridge Ratings interviews
which indicate the future pervasiveness of audio streaming and
audio downloading through mobile telephones. In fact, by 2010
we project the number of Americans streaming audio through mobile
telephones will match or surpass those subscribing to Sirius