The Motley Fool has an intriguing article today on why satellite radio may not be selling so well this holiday season.
They raise the question on whether satellite radio is really losing to bigger ticket items like flat-screen TVs and next-gen game consoles; and more importantly, whether satellite radio is a good holiday gift to begin with. The Fool's view is that subscription services are awkward presents. Unless the recipient has expressed the desire to have a satellite radio, you're pretty much unloading a monthly bill on their lap. Last year was easy... got a Stern fan? Buy a Sirius.
"They're little more than fruitcakes with circuitry."
Unfortunately it's a valid point. It's rude to hand over a gift that is only useful if they pay a monthly fee. So both companies don't just have to overcome a mental "conversion" with the subscriber, but they also need to convince the gift giver that "paying for radio" is appreciated by the recipient. That's rough
So it's understandable that both Sirius and XM are pitching three-months of service, plus radio, for under $99. The $100 price-point is attractive to many, and the 3-months ensures that the radios are at the very least activated (unlike last year) and hopefully sampled by their recipients.
But is three months enough? Hard to say, I guess we'll find out in March.
Is 3 months enough?.. don't know.. but a trial perod of over 3 months skews the subscriber count by not letting out the churn. XM also coverd the point made by the fools by having the gift card. Then the gift becomes something better than a Tie for dad.. just get him another year subscription to XM or Sirius. so.. is it rude to give a bill.... yes.. but not with a gift card and the intent to pay each year to avoid buying a tie.
I think both XM and Sirius recognize this issue and why they are including the 3 months with the purchase of the radios. I think this is a MUCH better idea than the rebates that they have historically made in the past.
I think the holiday numbers well be very telling to see if the market in sat radios peaked last year.
i so think if they would have tried in commercials to compare the stiletto with the ipod-educate the masses-they would have had SOME traction--its hard enough that much of country doesnt know the ins/outs of sats radio---that they would know what the hell a stiletto is
I love satellite radio and it seems like both companies are being as aggressive as they can be. It just seems like Sat. radio has a stigma attached to it that it is unable to shake. People spend tons of money on consoles and I-pod's yet remain leary of XM/Sirius. I don't know the answer but I just don't want to see either company get ignored. The public are very picky and with H.D. radio launching an advertising onslaught and the Zune being introduced, Sat. radio needs to keep up with all of the choices.
I got a portable and car satellite radio for free with 6 months free for Sirius as www.electronicsconsumerguide.com
Check it out!
That's crazy.
Last year I bought Sirius radios for three members of my family, as well as adding them to my subscription at half price. Now getting gifts for them is super easy. I just renew their subscriptions! If you hate shopping, its the best present ever.
Oh, and all three of them had no idea they wanted or needed satellite radio, but now say it's the best present they've ever gotten.
I do think the $12.99 monthly charge is a huge barrier to regular customers as well as gift-givers.
I think the main reason people cancel XM or Sirius is that they perceive $13/month as too much to pay for music - when they can just use CDs and IPODs for what they perceive is "no charge". Even though they shell out $250 for the hardware, $29 a pop for 4 or 5 accessories etc.
The Marketing teams at XM and Sirius need to put $13/month in perspective for people. Compare it to other hidden monthly charges, that people already pay for ...
one lunch at Friday's, Tuesday's, etc.
one movie ticket
1/2 an ink cartridge for your printer
one CD
1/2 a DVD
part of a Chia pet
a fruitcake
a golf ball cleaner
a set of meditation tapes for Mr. Type A
a crappy tie
You get the idea ...
Extremely valid point made in that article and the very reason I haven't considered buying satellite radio as a gift this Christmas. Any kind of subscription service given as a gift can only be classified as a "gift" if the giftgiver is also paying for the subscription (1 year minimum, IMO. 3 months is hardly a gift).
If the subscription isn't provided, then the gift is more of a burden than anything else. You can't assume that the person receiving the gift is going to be so enamoured with satellite radio that he/she is going to be willing to add another reoccurring bill to their payment schedules. A full year of service, though would be quite the gift and renewing the subscription for another year would make for an easy gift to consider for NEXT Christmas.
Here's a great way to give someone a satellite radio with 6 months free service ...
Just buy one of these Friends of XM deals, it comes enabled right out of the box. You can get great SkyFi2's with car kit for $49 (you pay $42 6-months service). For $99 that's a great gift for Dad or Mom or the college grad.
http://friends.xmradio.com/
i def. agree with giving satellite radios as a gift. Unless the recepient makes decent money and would like satellite radio (truck driver, etc.), there's no way im giving them a sat. radio. Also, since the weakening of the FM transmitters, more reason not to give them sat. radios cuz then they gotta cough up another $100 to hardwire the radio. Not good.
there is yet another aspect here. When more and more cars come with Factory installed XM or Sirius the need to buy an aftermarket reciver becomes less and less. Even CD's hit a year over year saturation point (retailers just could not move any more) I think this is where Satellite radio is at now. 2 million new subs apeice from here on out till they both hit about 15 million. being more driven by factory installed OEM.
Unless a person asked for a SATRAD gift, no thinking person would give a gift that might be useless in 3-6 months. The price point for a 12 month subscription would then become cost prohibitive.
Forget the past. Q4 isn't the season for Satrad sales as it once was. Early adopters have adopted.
A Friend of mine says he'd love to have satrad, but has no intention of jury-rigging his 3 year old car up with one. When he buys a new car, if it has satrad, then he'll adopt..... maybe.
Satrad folds should remind themselves that listing is a lot like sex. You don't really want it till you've had it, and then you can't stop.
Saints be praised.
Father Pockpie
All my friends that listen to Stern are already subsrcibers. I'm not giving satrad for xmas to anyone. But I'm not giving a Wii or a PS3 either.
Its all about the gift cards this year.
The GARMIN kiosks are busy as hell this Christmas !
XM needs to get XM chips in every damn one of these GPS units !
These GARMIN customers are already OK with a bulky after-market device sitting on their dashboard, and an antenna on the roof - so that hurdle is GONE !
Just push the XM button and groove to the tunes.
We gave my in-laws sat radio last Christmas, and they loved it so much they took over the subscription - however, it took about a year and a half of us paying for them on our 'family plan' to finally get them to do it.
Now my mom has my old car with XM installed and she's not yet convinced that paying the extra $13 a month is worth it. Perhaps if I threaten to take it away...;-)
I definitely agree with the notion that a pre-installed satellite kit in a new car is the way to go - that said, using the example of the latest Honda Civics (of which I'm upgrading my '04 to an '07), an EX model *without* XM costs about $800 to install. Not sure why they don't just go with some sort of aftermarket receiver/car kit, and save themselves about $600 in equipment and installation costs.
"These GARMIN customers are already OK with a bulky after-market device sitting on their dashboard, and an antenna on the roof - so that hurdle is GONE !"
Problem is one does not need an external antenna for a garmin to make it work. At least in my 10 years of ownership I have never used one.
I think if the radio is bought as a gift from someone else, the $6.99 rate should be grandfathered in for a year. And only for radios sold during the Christmas season. It also gives incentive for someone to buy a year for their friend. After that, it's up to the receipt if he wants to do another year...
Lots of good points on here.
Satellite Radio simply has too many barriers for people to get it as a gift. Here's some prime examples:
1) A unit sitting on the dash or windshield just plain looks ugly.
2) FM modulators. People HATE FM mods!
3) Wires. If you choose professional installation, it costs MORE money.
4) Subscription price (obvious reason).
5) Extra hardware (MORE cost) if they want satellite in the house, or a boombox.
6) A gift isn't really a gift if the recepient has to pay to use it. It's like buying a portable DVD player without a battery.
Don't get me wrong, I LOVE satellite radio, as most of us here do, but to the average joe, convincing them to pay for a service or extra parts, installation, etc, etc, isn't a great gift idea unless you include everything. It adds up very quickly, and may cost several hundred dollars after all is said and done.
On the Garmin GPS, i thought about that a while back. Would be great to have one of those handhelds especially with sat. radio. I can hike the mountains of the sierras and listen to my satellite radio.........nothing cooler than listening to sat. radio in the mountains or countryside away from the urban areas.
My dream mac-hine item:
Personal Media Player (audio, video,gps,sat.radio) Id pay serious cash for that one. :)
Ps.
One great thing is Sirius is giving a radio away for free if you add a 6-month sub to your acct at $6.95. That is a great start from the sat. companies which comes out to $91 a year. I actually think thats a great deal and you can just renew their subs every x-mas or birthday if they like it. Now, if they can only get the FM transmitter signal back up to par, we'd have something going there.
The big box stores will have a bunch of radios left after Christmas - and will be discounting them heavily,
just so they can move this HUGE inventory of sat radios !!! That's good for XM and Sirius !
Circuit City has (count them) 5 different kiosks of SAT radios in one store !
This hardware will move with heavy discounts paid for by the big box stores.
January is when the gift cards will get used - January should be a good month for subs !
Also ... Big Box stores may be getting impacted by on-line stores with cheaper radios? See this article ...
http://satellitestandard.blogspot.com/2006/12/estimating-holiday-sales-brick-mortar.html
More radios are being bought on-line ? ... one can hope !
I just bought a new honda with xm. Can anyone tell me how to get rid of the Preview - XM on the steering wheel mode. I can use the tuner button on the radio but when I try to channel up or down on the steering column it goes directly to Preview. Any help would be appreciated. Thank you.