MERGER OR NO, SATELLITE RADIO HAS 'ISSUES' Mike Boyle – Radio and Records The subscriber base at satellite radio may not greatly increase as a result of the pending merger between XM and Sirius. Moreover, the commitment among current subscribers to stay with either service is weaker, especially if the service came pre-installed in their vehicles. Those findings are part of the latest Jacobs Media Tech Survey IV conducted in late February/early March 2008 among more than 27,000 respondents across 69 different rock-formatted stations.
Jacobs noted that while details on how the proposed merger may impact pricing and packaging are still to be determined, most non-subscribers (the type of people that XM and Sirius are targeting) don't feel it will have any sway to motivate them to sign up.
Overall, the Tech Survey's findings point out that half of the respondents say the merger will not make a difference, while one-third don't have enough information about it to make a judgment. In addition, one in 10 is optimistic about the merger, while an additional 6% don't think it will be a positive. Only current XM and Sirius subscribers seemed to be upbeat about a merger of the two satellite radio companies.
"But the bigger issue is that many current subscribers are not committed to continuing with either XM or Sirius," said Jacobs Media president Fred Jacobs. "Here's the dirty little secret -- if it came with the car or truck you purchased, or you received it as a gift, your inclination to continue the subscription is shaky."
Overall, the survey found, only four in 10 current XM and Sirius subscribers made the decision to subscribe to satellite radio on their own. For one-third, it was pre-installed in their vehicles, while one-fifth received satellite radio as a gift. And for 7%, XM or Sirius was part of a satellite TV package.
One bright spot, though, as two-thirds of subscribers who chose XM and/or Sirius on their own say they will absolutely continue with the service through 2008. But Jacobs adds, "Here's the rub -- only four in 10 of those whose vehicle came installed with satellite radio say they'll absolutely stay with the service. And nearly a third indicate they'll likely discontinue or aren't sure about the status of their subscription. Clearly, there's a lot of churn happening, putting pressure on satellite radio to sell new subscriptions just to stay even." |