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Satellite Radio - Is PR Running Out of Steam?

CBS MarketWatch may have sent a chill down satrad execs' backs over the weekend. It reported how " J.P. Morgan analyst Barton Crockett suggested in a recent research note that consumer interest in satellite radio may already be declining, based on data his firm compiled."

In a moment, I'll show our own statistics. For now though, consider that the successful launch of any new venture is - in part - determined by the ability to grab headlines. As has been repeated here numerous times, Sirius and XM Satelite Radio have public relations companies working for them that go beyond most PR successes we've seen.

For months (years?) we've had a constant barrage of headlines touting the wonders of programming heard on satellite radio. But how much more programming can be acquired?

Both companies are operating as if they are the US government, with debt that would crush a normal business model. Neither Sirius nor XM are close to being profitable. And, as the article below states, they both might be shoring up the wrong end of their programming with talk, sports, and shock jocks.

Music is the key to satrad's success. No other genre of radio has a fan base large enough to sustain itself on a satellite-delivered signal. All but shock jocks are available on free radio.

Two signs to watch from Sirius: 1) While Howard Stern may lure enough folks to justify his $100-million-a-year deal, most programs offered by this company are loss-leaders. 2) Its new CEO (Mel Karmazin) has a reputation for slashing operating costs.

Also, consider that XM Satellite Radio's deal with auto manufacturers offers new car buyers their initial subscription free - an action that pumps up subscriber numbers considerably. Read the latest estimates here.

Then there's this: Our current RRadio Network survey of online radio listeners is indicating that only a small segment of this group say satrad is in their future. When asked "By this time next year, what do you see yourself listening to most?", 890 respondents break out as follows:
7.6% satrad
13.8% broadcast
10.5% MP3 player
61.7% Internet radio
1.9% cable music channels
4.2% other

Related Article:
CBS MarketWatch
registration required

Posted: 12:59 2/21/2005

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