Satellite Radio

Research and Markets has announced the addition of the eMarketer report: The Satellite Radio Report to their offering.

January 2006 marks a turning point in the history of broadcasting: Howard Stern leaves traditional radio and begins beaming from subscription satellite radio provider Sirius. It’s one more example of the major shifts occurring in media distribution and consumption.

The Satellite Radio report explores the phenomenal new media channel that has grown faster than satellite TV–and the impact that growth is having on all media.

Key questions the “Satellite Radio” report answers:

- Who is listening to satellite radio?

- What are the differences between the two satellite radio providers, XM and Sirius?

- What impact will the Howard Stern move have–on Sirius and the overall satellite market?

- What challenges do satellite radio providers face?

- And many more…

Topics Covered

- Impetus

- Satellite Radio Subscribers in the US, 2004-2010 (in millions)

- Issues & Questions

- Anticipated Actions of US Howard Stern Listeners* in Reaction to His Move to Satellite Radio, July-November 2005 (as a % of respondents)

- A. The Current Satellite Radio Market

- B. Demographics

- Related Information and Links

Extract - Advertising:

Both Sirius and XM feature commercial-free music stations, but have some commercials on their talk and news shows. These include on-air reads by radio personalities, which can bring in thousands or even tens of thousands of dollars per read, depending on the popularity of a show. Broadcasting coast to coast, satellite radio offers marketers a national audience for their advertising, an opportunity not available with terrestrial radio.

For the nine months ending September 30, 2005, XM reported $12.8 million in advertising revenue, up from $4.5 million over the same period in 2004. Sirius reported $3.1 million in advertising revenue for the latest nine months, up from $399,000.

Sirius and XM are looking to increase their advertising revenues. According to a recent article by Reuters, Tobin Smith, founder of ChangeWave Research, estimates that 8%-12% of Sirius’ revenue and 5% of XM’s will come from ad sales in five years. Smith gives the advertising advantage to Sirius because of Stern and Sirius CEO Mel Karmazin, who has vast experience in radio advertising. Both companies also plan to offer subscribers the ability to purchase songs and content they hear on the radio as they listen, offering another income stream.

Deutsche Bank estimates that total advertising revenues for both companies will reach $481.6 million by 2012, up from $9.4 million in 2004. Although XM currently brings in more advertising revenues than Sirius, by the end of the decade, Deutsche Bank predicts that this situation will have reversed.

Advertising revenues will stand at about $28 million by the end of 2005, according to Kagan Research, and will total over $854 million by 2014.

SIRIUS Satellite Radio (NASDAQ: SIRI), the Official Satellite Radio Partner of the NFL, will provide the most comprehensive radio coverage of Super Bowl XL, with multiple live game broadcasts, live day-long news and analysis every day of Super Bowl Week.

On Super Bowl Sunday, February 5, SIRIUS will air an expanded lineup of live play-by-play broadcasts of Super Bowl XL to its growing nationwide subscriber base, which has tripled since last year’s Super Bowl. SIRIUS will offer 11 different game calls in seven languages, including both teams’ local radio broadcasts and the national Westwood One/CBS Radio Sports broadcast. SIRIUS subscribers can choose from:

· Pittsburgh Steelers team broadcast - channel 125

· Seattle Seahawks team broadcast - channel 123

· Westwood One/CBS Radio Sports broadcast - channel 124

· BBC Radio broadcast (UK) - channel 126

· Westwood One Spanish broadcast (Spanish-Latin America) - channel 181

· Canal + Spain broadcast (Spanish-Spain) - channel 131

· NTV + Russia broadcast (Russian) - channel 147

· BeTV broadcast (French) - channel 143

· SMG broadcast (Mandarin Chinese) - channel 110

· TV 2 Denmark broadcast (Danish) - channel 117

· NTV Japan broadcast (Japanese) - channel 107

From Monday, January 30 through Super Bowl Sunday, SIRIUS NFL Radio // ch. 124, SIRIUS’ 24/7 year-round NFL talk radio channel, will broadcast live from Detroit and will be streamed live and free of charge on the NFL’s official game site www.superbowl.com.

Throughout the week, SIRIUS NFL Radio’s coverage will also include up-to-the-minute news, interviews, live press conferences, and analysis from SIRIUS NFL Radio’s lineup of NFL experts, which includes John Riggins, John Madden, Cris Carter, Shannon Sharpe, Carl Banks, Randy Cross, Gil Brandt, Tiki and Ronde Barber, Tim Ryan, Pat Kirwan, Adam Schein, Bob Papa and Steve Cohen. On Media Day, Tuesday, Jan. 31, SIRIUS NFL Radio will broadcast live from Ford Field with interviews with the players and coaches who will take part in this year’s Super Bowl.

SIRIUS NFL Radio Daily Schedule:

Every Weekday

o 8 am – 10 am ET: The Opening Drive with Bob Papa, Gil Brandt, Pat Kirwan and Tim Ryan.

o 10 am – 1 pm ET: Movin’ The Chains with Tim Ryan, Pat Kirwan, Shannon Sharpe and Bob Papa.

o 1 pm – 3 pm ET: The Red Zone with Steve Cohen, Cris Carter and Gil Brandt.

o 3 pm – 7 pm ET: The Afternoon Blitz with Adam Schein and John Riggins.

o 7 pm – 8 pm ET: NFL Network’s Total Access. The latest league news, direct from the NFL.

Tuesday

o 7 pm – 8 pm ET: Ronde and Tiki’s Barber Shop hosted by Ronde Barber, Tiki Barber and Adam Schein. (From New York studios)

Saturday

o 8 am – 11 am ET: The Weekend Kickoff with Paul Allen and Jeff Dubay.

o 11 am – 2 pm ET: Press Coverage with Vic Carucci and Dan Leberfeld.

o 2 pm – 6 pm ET: The End Zone with Tim Ryan and Pat Kirwan.

o 6 pm – 8 pm ET: Chalk Talk. The best interviews and commentary from the previous week on SIRIUS NFL Radio.

Super Bowl Sunday

o 9 am – noon ET: The SIRIUS Tailgate Show with Adam Schein, John Madden, Archie Manning, Gil Brandt and Steve Cohen.

o Noon – 3 pm ET: The End Zone with Randy Cross and Bryan McGovern.

o 3 pm ET: Westwood One/CBS Radio Sports Super Bowl XL coverage.

o Postgame coverage live from Ford Field with Steve Cohen and Pat Kirwan.

SIRIUS listeners in the Detroit area during Super Bowl Week can also monitor traffic conditions by tuning in to SIRIUS First Traffic and Weather for Detroit on channel 155.

As the Official Satellite Radio Partner of the NFL, SIRIUS broadcasts live nationwide every pre-, regular, and post-season game of the NFL season, plus the Super Bowl and Pro Bowl. Listeners can hear Westwood One/CBS Radio Sports’ broadcasts and Spanish-language broadcasts for select games. Fans can also tune into SIRIUS NFL Radio, channel 124, for the only 24/7/365 radio channel dedicated entirely to pro football talk.

In addition to being the Official Satellite Radio Partner of the NFL, NBA, NHL, Wimbledon Championships and Barclays English Premier League soccer, SIRIUS broadcasts play-by-play for more than 150 colleges, including the entire NCAA® Division I Men’s Basketball Championship (March 14 – April 3, 2006), plus several of the year’s top thoroughbred horse races. Starting in 2007, SIRIUS will be the official satellite radio home of NASCAR.

SIRIUS Satellite Radio has announced that the company has appointed Andreas Lazar as Senior Vice President, Business Development, reporting to Mel Karmazin.

Lazar, previously a Vice President and investment banker at Allen & Company LLC, will be responsible for exploring and structuring strategic partnerships with media, communications and technology companies to extend SIRIUS’ product breadth and drive subscriber growth.

“As our technology, products and programming continue to evolve, Andreas’s extensive experience will enable us to pursue the many business opportunities available that can extend SIRIUS’ footprint to increase subscriber growth and revenue even further,” said Mel Karmazin, CEO of SIRIUS. “We look forward to having Andreas work with me and the executive team as we explore the numerous possibilities before us.”

At Allen & Company, Lazar initiated and executed strategic and financing transactions for companies in media and communications industries, including mergers and acquisitions, public and private equity financing and direct investments in selected companies.

Prior to Allen & Company, Lazar worked as an investment banker for Credit Suisse First Boston, executing mergers and acquisitions and capital raising activities in the media and telecommunications industries.

Lazar is a graduate of Harvard University with a degree in Economics.

While Sirius is proudly spinning numbers of subscribers and XM join them in boasting the expected growth and uptake of Satellite Radio, American Media Services has found that the ‘Howard Stern Factor’ is Overrated. In fact, their findings will be fairly shocking to the Satellite Radio industry.

Despite recent media attention
about shock jock Howard Stern’s widely publicized transfer to satellite radio,
a nationwide survey indicates a large majority of Americans (86 percent) are
not likely to consider the purchase of satellite radio in the future because
of his move.
Broken down further, 69 percent of those responding said they were “not at
all likely” to consider purchasing satellite, and 17 percent said they were
“not very likely” to after Stern’s move. The respondents’ negative reaction
to the Stern question was even stronger than another question that asked their
likelihood of paying for satellite service.
In that question, respondents were first told that satellite radio usage
requires the purchase of equipment and a monthly fee, then were asked if they
were likely to purchase satellite radio over the next year. Eighty-two
percent said such a purchase was unlikely, with 64 percent saying they were
“not at all likely,” and 18 percent responding “not very likely.” Eighty-
eight percent of those surveyed responded that they are not subscribers of
satellite radio.

The survey also revealed that almost two-thirds of those surveyed — 64 percent — responded that they are listening to radio more, or about the same amount of time, as they were five years ago.

The AMS survey was a random digital dial telephone survey of 1,008 American adults that was conducted by Roper OmniTel, the weekly omnibus survey of GfK NOP of Princeton, N.J. The survey was conducted over the weekends of January 13-15, 2006, and January 20-22, 2006. A random sample of this size reflects American opinion within plus or minus three percentage points.

Additional Stern-related findings indicated that only 12 percent of respondents were likely to consider purchasing satellite radio to listen to Stern. Of those respondents, most fell into the 18-34 age group, and men outnumbered women two to one. Outside of that age group, the respondents’ likelihood of purchasing satellite because of Stern fell off sharply.

The Washington Times is reporting that an Arkansas man has filed a lawsuit against XM Satellite Radio stating that the company’s marketing of its music channels as completely commercial free is “false, misleading and deceptive.”

Michael Enderlin filed the suit and is seeking punitive damages and hopes to prohibit the Satellite Radio operator from advertising and selling “commercial free” products when, in actual fact, they aren’t.

XM have said that the suit is without merit and that XM doesn’t air commercials on its music channels.

Enderlin’s legal representation will be filing a motion for class action against XM which could be disasterous for the company if the suit is successful in court. With more than 6 million subscribers who have each had to pay subscriptions and purchase XM specific hardware, a loss in this case could see them forking out millions of dollars in damages and threaten their very existence.

Sirius shouldn’t be happy about the suit either. Both XM and Sirius tout their music channels as 100 percent commercial free and word of the XM lawsuit has meant that some Sirius subscriber is bound to catch on and jump on the bandwagon.

Satellite Radio is everywhere. Turned on your TV recently? Picked up a magazine? Seen a billboard? Satellite Radio is on a mission to become what Satellite/Pay TV is now. Originally people scoffed at the thought of paying for television broadcasts and initially it was something for the rich. Now, everyone has it and it isn’t so much viewed as a luxury item but as a necessity in order to stay in the loop. It is this mentality that Satellite Radio operators XM and Sirius are banking on.

If XM and Sirius can convince us all that shelling out $13 a month is necessary in order to keep up with the latest news, sport and music then rest assured, Satellite Radio will be as successful as Satellite TV is.

Terrestrial radio, of course, thinks it is a flash in the pan but I guess that is what they tell themselves to help them sleep at night.

High Definition Radio is what many in terrestrial radio believe is their answer to the onslaught that is Satellite Radio. Clear Channel Communications are launching new programs in the greater Boston area allowing them to take advantage of digital signals that let them broadcast additional shows across one frequency.

The only problem with this new technology is that in order to listen to it, you’ll need to spend some money to buy the hardware that will be able to receive it, and at this point in the game, we’re talking hundreds of dollars, something that isn’t going to be enough to convince people to come across. Why would I spend $499 for an HD radio receiver when I can spend half that and get a Satellite Radio receiver that gives me access to 100 or more stations?

By the time HD gets any traction, the horses will not have just bolted from the stable, they’ll probably be having offspring in another paddock.

The estimates that Canadian Satellite Radio subsrcibers will top 2 million by the end of 2006 may not be too far wrong considering that Satellite Radio devices were practically flying off retailers shelves during the Christmas period.

If you’ve got an XBOX 360 then you might want to check out this download which will let you hook into XM’s web feature with your subscription, enabling you to listen to XM radio via your Xbox 360.

I’ve heard it said that there is a similar product for Sirius. If anyone knows what it is, please leave a comment below.

Howard Stern’s move to Sirius has boosted the visibility of satellite radio. Here’s a comparison of Sirius and XM listeners courtesy of comScore.

• The online behavior of Sirius Satellite Radio Owners demonstrates a penchant for higher-end goods and services compared to owners of XM Radio. Sirius owners are 40 percent more likely than the average internet user to visit Jewelry/Luxury Goods/Accessories sites and 13 percent more likely to visit Fragrances/Cosmetics sites (see Table 1). They are also 22 percent more likely to visit Online Trading sites. Likely a result of Sirius Radio’s broadcasting partnership with the National Football League, Sirius owners are also 16 percent more likely to visit Sports sites.
• Owners of XM Radio exhibit a high propensity to visit travel-related sites. They are 89 percent more likely to visit Car Rental sites and 45 percent more likely to visit Airline sites (see Table 2). This positioning is probably the result of XM’s strategic partnership with Car Rental agencies to carry XM in their vehicles.