Recently the topic of Sirius' "Car Lot Subscribers" seems to have been picking up steam with terrestrial radio. The source of this frenzy is based on comments by Sirius CFO David Frear at the Merrill Lynch Media & Entertainment Conference.

At the conference, Frear was asked exactly how many subscribers are "cars just sitting on the lot" - of which Frear responded that in Q4 2005 the number was about 10% of subscribers, and this past quarter it was in the 8% range.

Listen to the Audio here.

Now, the terrestrial radio has taken this and ran with it. David Rehr's keynote at the NAB Radio Show, specifically highlighted "those 500,000 subscribers in empty car lots." Inside Radio (which sometimes seems like a good resource, while at other times is just a megaphone for the NAB) was actually the first publication I could find that threw out the solid 500,000 number after Frear's speech. Even Jacob's Media has gone so far as to compare Sirius' "half million unsold vehicles on car dealer lots" to Sarbanes-Oxley compliance. (wha?! Apples... meet Oranges.) UPDATE: Check out this PDF by Inside Radio (pictured) to see how this propaganda is being pushed (page 26 - or you can read the full thing and see a photo of Mancow in a monkey suit)

But let's break this down for a minute. Is the number really 500k? In 2Q 2006, Sirius reported something like 4,678,000 subscribers. At 8% that's around 374,000 "car lot" subscribers. And as Frear pointed out, the average days these vehicles spend on the lots is around 90 days (culmatively... Bimmer's have a tendency to fly off the lots whereas Fords and Chryslers stick around longer).

Now, just for the record, I'm not criticizing Siruis' policy for reporting unsold cars as subscribers - I'm actually disputing the NAB's propaganda of a "half million subscribers" that they seem to be enjoying. The practive is almost understandable from an accounting standpoint since Sirius gets paid at the time of production. The only thing it does is make it difficult to compare Sirius net subscribers with XM's net subscribers - which is a comparison that only Wall Street does (and those who are running the numbers should be factoring in that percentage anyway). Other than that, why does it matter? As if Arbitron reports exact numbers.

OK, so the burning question, what about the year's to come? Frear said that the percentage of car lot subscribers is shrinking. That makes sense when you consider that Sirius' subscriber count continues to grow. According to Bank of America estimates: in 2007 the percentage will drop to 6%, with car lot subs equaling 542,000. By 2010? Maintaining the 6% rate, you're looking at a total of 964,000 car lots subscribers.

[more on TheStreet] 

You know a message is just too complicated when the Local News simply cannot describe it to their audience.

Enter Minneapolis NBC affliliate KARE 11. They broadcast in HDTV, so it would make sense that they run a segment on HD Radio. The funny thing about this video is that in the middle of trying to explain what it is, the viewer undoubtedly will get completely confused. They couldn't have done a better job at driving people away from HD Radio.

Watch the video until the very end. That's where the anchor tries to sum it all up, yet she goes on so long that she has to make a joke about it (with her co-anchor and the weather girl chiming in as well). Unfortunately, the online clip doesn't show the end: where the male anchor crumples up his script and throws it away. Perfect.

Here's the problem. When you create a product based on the need of the company, and not on the need of the market, you're going to have an overly complicated message. The only people who need HD Radio and the companies who are pushing it. 

[KARE 11]
Thanks to lil' conner for sending this in!

NAB President and CEO David Rehr wrote a letter (PDF via SSG) to Sirius and XM, that coincided with his opening speech at yesterday's NAB Radio Show, where he called on the satellite radio industry to "voluntarily withdraw and replace all noncompliant satellite radio devices in circulation."

"...now that the FCC has approved the resumed manufacture of newly compliant satellite radio receivers, NAB urges XM and Sirius to take the next logical step of voluntarily withdrawing and replacing all noncompliant receivers already in circulation, to resolve existing interference to terrestrial radio service," Rehr wrote in his letter.

In his speech, he didn't just "urge" XM and Sirius to recall all non-compliant satellite radios, but he also went on to say that the interfering FM modulators are making satellite radio "both a subscription and a free service," and that satellite radio as a result "cannot have it both ways" when it comes to being beyond FCC indecency regulations.

Oh but David Rehr didn't stop there. He goes on to claim that the NAB isn't afraid of the competition because "satellite radio says it has at most 10 million subscribers, notwithstanding those 500,000 subscribers in empty car lots. But 260 million people listened to broadcast radio last week alone!"

You can read the full speech here. Feel free to email David Rehr, at drehr@nab.org and let him know what you think.

John Mainelli, the New York Post reporter who helped spread the rumor (twice) that Howard Stern is returning to terrestrial radio, has left the paper after receiving an ultimatum from editor in chief Col Allan.

Mainelli was told that he had to choose between his freelance job covering the radio industry for the Post and his consulting for terrestrial radio stations and owners. Something that was not disclosed in his articles, magnifying a possible conflict of interest.

Though Mainelli was pretty much regurgitating a report from Inside Radio, he did spice up his story a bit saying that Stern was having trouble booking celebrity guests (something that Gary quickly squashed).

Howard 100 News called attention to Mainelli's terrestrial radio consulting ties on air, which was quickly picked up by Jeff Jarvis' Buzzmachine.com. The information then made its way to the New York Post's Editor in Chief.

"I'm very disappointed, and I'm really pissed at Howard Stern," Mainelli said. "From now on, anything I write about him will have to have a disclaimer: John Mainelli has an ax to grind against this man."

[Radar Online] 

UPDATE: Listen to the Howard 100 News report below:

;

HD Radio, the new digital radio format, for those of you keeping score at home, is now available from about 1,000 stations who are simulcasting in HD and in traditional formats -- which is still less than 10 percent of all American radio. Furthermore, the price of a new HD radio still remains significantly higher than a pocket or tabletop analog radio. How much higher? Well, this newest offering will set you back $300 when it becomes available in November -- and that little $20 "transistor" radio your Mom gave you in 1987 still works great, doesn't it? So yes, we're still listening to National Public Radio and baseball games in analog, thank you very much.

An article by the New York Post's John Mainelli set off Howard this morning on his show. Citing Inside Radio's claim (which incidently Orbitcast cited as well) that Sirius CEO Mel Karmazin was in talks with Citadel's CEO Farid Suleman, John Mainelli expanded on the rumor hinting that WPLJ or WABC were possible outlets.

Howard Stern explicitely stated on his show that he has absolutely no intentions of returning to terrestrial radio. He's quite happy on satellite radio.

You all called bravo-sierra on this one, and obviously were right (did anyone believe this rumor?) but just in case there was any doubt... there should be no more.

[New York Post] 

Side Note: A post on SeekingAlpha seems to think that a good way for Stern to boost his popularity, and Sirius subscribers, is by... uhm, podcasting. Pure genius.

Hear 2.0 is featuring a look at the FM radio included in Microsoft's new Zune player.

No this isn't the first MP3 player to include FM radio, but it is by far the highest profile one. The iPod's FM tuner add-on doesn't count in my book. The whole concept of integrating a radio into a digital audio player is to allow for effortless listening to music, and discovery of music (essential for the continued success of MP3 players). It also provides the sense of "choice" to the consumer.

Satellite radio provides the same thing. Only better. It's just a matter of time before Microsoft and/or Apple come to this realization.

[Hear 2.0]

A spin-filled article on Radio World Online by Guy Wire (ugh) entitled Satellite in Trouble as HD Grows left me scratching my head by the end of the piece. It starts out by painting Sirius and XM as a fool's investment, stating that both are seeing "subscriber growth rates slow and begin to level off." Level off? I don't know about that.

He then goes on to build a doomsday scenario of how both companies are hemoraging money, facing regulatory troubles, and lumps satellite radio in with "any other high-tech venture that over-promises and under-delivers." Yet, all his points stem from events spanning the past 9 months. Nine months there "Guy."

At this point I'm waiting for the HD Radio speech. So far it's just been a satellite bash-fest... where's the meat? He instead goes on to talk about how terrestrial radio is the most logical savior of satellite should the auto manufacturers decide to cut their losses. In fact, terrestrial having controlling ownership would be the best thing for satellite! So the article now has turned from a satellite bash-fest, to a terrestrial love-in. Riveting.

But where's the point about HD? Oh wait, here it is at the end. Instead of filing HD Radio away with FM Quad and AM Stereo, which many are doing, he instead compares HD Radio to FM. FM started in 1961 yet needed 10 years to take hold, and another 10 years before becoming the "dominant choice for consumers," which he pridicts will be "the same pattern is likely to be charted by HD Radio."

So... in 20 years HD Radio will become popular? Hallelujah! Yet, the occurances of the past 9 months spell complete failure for satellite radio? Amazing insight! Do yourself a favor, keep your smoke blowing propaganda to internal emails there "Guy" - your rant just fell apart.

[Radio World Online]

A new Omnitel/American Media Services (AMS) study finds that 27% of Americans are listening to the radio less than they did five years ago. Meanwhile 51% of those surveyed say their listening hasn't changed in the past five years while 21% say they listen more.

A majority of respondents (74%) expect to be listening to about the same amount of radio in another five years, while 11% said they they'll be listening less and 13% expect to listen more.

What about discovery of new music? 63% said they find new music from the radio, with 43% saying they hear about it from friends, 41% from TV, 24% from print, and 16% from the Internet.

So if 63% say they turn to radio to discover new music, yet terrestrial has lost its appeal in over 1/4 of those surveyed... what exactly does that tell you?

"New" music isn't necessarily "just released" music. "New to me" music is just as interesting.

[via FMQB] 

Clear Channel Radio's Total Traffic Network has inked a multi-year deal with BMW to provide traffic data to navigation systems offered in select 2007 BMW models, including the X5, M5, M6 and the 3, 5 and 6 Series models.

BMW's nav system, equipped with Clear Channel's traffic service, will become available as early as mid-September, and Total Traffic Network's data will be included with no monthly fees. This makes BMW of North America the first US auto manufacturer to offer real-time traffic as a standard service on navigation-equipped vehicles.

In my opinion deals like this pose a signficant threat to the satellite radio industry. Extended satellite services like XM NavTraffic and SIRIUS Traffic (and others like the upcoming XM ParkingLink) are flagship products that introduce consumers - especially luxury-oriented ones - to the core satellite radio offering. As nav systems become more ubiquitous in vehicles, consumers will be attracted to services that extend the capabilities of these systems. When presented with the choice between free and a pay service, it doesn't take a genius to figure out which one they'll go for.

This also marks the second time that BMW has opted to include a terrestrial radio backed technology - being the first automaker to include HD Radio as an option (albeit, an expensive one). And don't forget that they spearheaded the iPod integration option as well.

The question remains as to whether the service is even worthwhile, considering that Clear Channel's Total Traffic Network uses its own network of reporters, traffic cameras, helicopters and airplanes to provide traffic updates (as opposed to XM and SIRIUS who both use NAVTEQ). But with more than 125 metropolitan markets covered - versus XM's 44 markets and SIRIUS' 30 markets - the numbers comparison by itself isn't very positive.

UPDATE: Apparently the Total Traffic Network covers 125 markets in three countries (US-of-A, Mexico and... New Zealand). As for the number of US markets specifically it's the same as XM: 44.

[via FMQB]