What a difference a year made for satellite radio

This article was written by Sarah McBride of The Wall Street Journal and was published by the Associated Press Financial Wire for the Business News section and is dated December 8, 2006. McBride compares the success of satellite radio in 2006 with that of the previous year, and notes that the hype about satellite radio has slowed. Although there was much talk about the format in past years, it is apparent that satellite radio has not reached mass-market status. In order for satellite radio to stay in the game, XM and Sirius have teamed up with car manufacturers to install satellite radio receivers in their cars. They have also designed campaign strategies to raise public awareness of the products including special deals for subscriptions. McBride suggests that the best route for the satellite radio providers is to focus on business in the car industry where they are making most of their profit.

I agree with McBride’s analysis. It seems that satellite radio isn’t doing too well in the gift giving arena, and is doing a lot better by teaming up with car industries. By having installed satellite radio receivers in cars, it eliminates the complexity of consumers learning how to set it up.

COMPLEXITY:

• Sarah McBride notes in "What a difference a year made for satellite radio" that some may be put off by the trouble it takes to actually use satellite radio. As one consumer said, installing the components needed to make satellite radio work is "too complicated."

TRIALABILITY:

• In an interview with McBride, Dan Krokosky, the recipient of a satellite radio player explains, "I would want to include the subscription for a year, and that would make it pretty expensive."
• Receiving satellite radios as gifts has not proven to be an incentive to get costly subscriptions.

OBSERVABILITY:

• According to Sarah McBride in “What a Difference a Year Made for Satellite Radio,” while most users of satellite radio are early adopters, it has yet to reach mass-market status.
• Fans may find the benefits of satellite radio satisfying, but it is not appealing to those who have yet to try it.
• McBride points out that some strategies satellite radio providers are using include “prime-time television commercials and advertisements in magazines and big-city newspapers…sponsoring public-radio programming” and having celebrities of satellite radio like Howard Stern make public appearances on talk shows. (416)