While the conglomerations behind terrestrial radio stations do their best to stop the proposed XM/Sirius merger, the still-separate satellite radio providers look they might be in a bit of financial trouble.
As gas prices skyrocket, people lose their jobs, and the economy in general sucks, consumers are less likely to sign up for an extra $12 a month to listen to the radio.
The nation’s only two satellite services are growing slower than previously while the broader economy is in a slowdown. Fewer people have been buying new cars, which is where the companies derive the bulk of new subscribers. And as higher fuel and food costs take their toll, analysts worry consumers will quickly ditch discretionary services such as satellite radio….
One area falling far short of projections is the number of consumers buying satellite radio in stores, rather than acquiring it factory-installed as part of a new car purchase. In recent years, most analysts predicted retail sales would rise every year. In fact, they declined 35% last year.
And compared with other emerging entertainment media, satellite radio doesn’t seem to be catching on as fast with the American public.
Last year, 21 million Apple iPods were sold in the U.S., according to Gene Munster, an analyst at Piper Jaffray. About 54 million Americans listen to Internet radio every week, according to Sean Ross, vice president for music and programming at Edison Media Research. By comparison, Washington-based XM Satellite Radio and New York-based Sirius together added 3.7 million net new subscribers last year. By the end of March this year, their subscriber levels reached a combined 17.9 million.
The miserable radio stations here in Phoenix finally pushed me over the edge this year, and I purchased a Sirius receiver, so it’s a little hard to fathom going back to the FM dial at this point. However, once the renewal date comes around, if the gas prices are hovering around $18 a gallon–a projection based on my faulty memory and current trends–it’s going to be difficult justifying an additional expense added to my driving experience, even if the stations are available online. I’d miss having BBC Radio 1 while driving around, but I imagine the shuffle feature on my iPod would fill in just fine, and in a vastly cheaper manner. (That being said, you’ll never convince me to get on board with the HD Radio deal, especially if if Clear Channel is in any way responsible for the content.)
Slowdown Generates Static for XM, Sirius [Wall Street Journal]
I loved Sirius for the first month, then I realized their play lists are nearly as repetitive as the FM radio in my area. HD Radio is going to be a non-starter. I worked at the station proud to be the first in the area broadcasting in HD. Almost two years later, and the consumers are still going “HD what?”
I wouldn’t touch Satellite Radio, at any point - they have a combined 3.5 billion in debt, coming due in 2012. Even more so, I wouldn’t fork over anything for HD Radio, which suffers from dropouts, poor coverage, interference, and bland HD channel programming. HD Radio is a scam to hijack our public airways by iBiquity and the HD Radio Alliance:
[hdradiofarce.blogspot.com]
@PocketRadio: Wow, tell us how you really feel about HD Radio!
I wouldn’t invest in the stocks of either company, but I still love XM and the variety of programming. I cannot recall the last time I listened to terrestrial radio except for when my car got busted into my old unit got ripped off.
XMU 4 life… except when I’m listening to Liquid Metal. It’s like “ooh, lykke li! Ooh! Cattle Decapitation!”, and the stations are right next to each other so I’m unlikely to take out a bus or pedestrian while flipping back and forth!
For serious (and not necessarily Sirius), I love my satellite radio. Kansas City (and formerly Urbana, IL) lack good radio.