Subscribers fall at satellite radio cos.

This article found in LexisNexis Academic was written for “AFX International Focus” and was dated Thursday, December 14, 2006. The purpose of this article was to observe problems with satellite radio in accumulating subscribers. It focuses on how satellite radio broadcasters are trying to rejuvenate the falling subscription growth. As pointed out in the article, satellite radio broadcasters are planning to work with car companies by installing more satellite radio receivers in cars. The satellite radio companies plan to give consumers who buy these cars a free trial subscription in hopes of eventually turning them into long-term subscribers. However, they may face competition as MP3 players, like the iPod, are coming out with ways in which consumers can hook up their players to car stereos to listen to music without commercials.

Because I am not a driver myself, I can’t observe the adaptations of satellite radios in cars. However, I don’t think it’ll make much of a difference to consumers whether or not they have satellite radio. Like the article pointed out, many MP3 players have already started to take over potential satellite radio consumers. Because of the ease of hooking up MP3 players into car stereos, many people I know don’t even listen to their radios anymore.

TRIALABILITY:

• The two U.S. satellite radio providers, XM and Sirius, try to hook consumers with free trial subscriptions in hopes that these will turn into long-term deals.

OBSERVABILITY:

• In the article entitled, “Subscribers fall at satellite radio cos.” written for “AFX International Focus” on December 14, 2006, Bernstein analyst Craig Moffett explains that “[i]n 2006, about 27 percent of the new cars manufactured had satellite radios. He expects that percentage to increase to 55 percent by 2010.”
• UBS analyst Lucas Binder points out in the same article that “it took seven years for compact disc players to achieve the installation rates that satellite radios have gotten in three years.” (337)