Merger Concerns: Slowed subscriber growth
Wednesday, February 21, 2007 at 8:54 AM
An article in BusinessWeek goes through some of the possible downsides to this match made in heaven, one of which is most notably - a slowed growth in subscriber acquisitions.
Researchers at IDC had previously estimated the satellite radio industry to reach a combined 22 million subscribers by the end of 2007, but now with the widely publicized merger announcement they're concerned that they miss this target.
Subscribers may be less incline to sign up "given the uncertainty around the merger and availability of service on an ongoing basis," says Susan Kevorkian, an analyst with IDC.
Add to that, concerns for raising prices (as a "monopoly") might deter would-be subscribers.
But the slowdown may occur on the automotive adoption side as well. Satellite radio is an industry that is largely dependent on another industry, and if automakers hold off in adding additional satellite-equipped models, it could prove disastrous.
This last point is absolutely something within the control of both XM and Sirius though. The company's respective OEM departments are obviously working overtime to help keep automaker's concerns at bay.
But from a retail standpoint, a channel that has seen a 46% year-over-year decline in the month of December, it may be necessary to qualm the concerns of would-be subscribers. In fact, the upcoming season may be an opportunity for consumers to take advantage of the industry's response to concerns. Discounts and incentives could very well be on the horizon and retailers may want to promote the fact that these receivers would be "future compatible" with whatever service lies ahead.
Wednesday, February 21, 2007 at 8:54 AM
An article in BusinessWeek goes through some of the possible downsides to this match made in heaven, one of which is most notably - a slowed growth in subscriber acquisitions.
Researchers at IDC had previously estimated the satellite radio industry to reach a combined 22 million subscribers by the end of 2007, but now with the widely publicized merger announcement they're concerned that they miss this target.
Subscribers may be less incline to sign up "given the uncertainty around the merger and availability of service on an ongoing basis," says Susan Kevorkian, an analyst with IDC.
Add to that, concerns for raising prices (as a "monopoly") might deter would-be subscribers.
But the slowdown may occur on the automotive adoption side as well. Satellite radio is an industry that is largely dependent on another industry, and if automakers hold off in adding additional satellite-equipped models, it could prove disastrous.
This last point is absolutely something within the control of both XM and Sirius though. The company's respective OEM departments are obviously working overtime to help keep automaker's concerns at bay.
But from a retail standpoint, a channel that has seen a 46% year-over-year decline in the month of December, it may be necessary to qualm the concerns of would-be subscribers. In fact, the upcoming season may be an opportunity for consumers to take advantage of the industry's response to concerns. Discounts and incentives could very well be on the horizon and retailers may want to promote the fact that these receivers would be "future compatible" with whatever service lies ahead.
So this is pretty neat. Two of XM Satellite Radio's on-air hosts - Mike Marrone of 
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