In a recent report released by Bank of America Analyst Jonathan Jacoby, it was stated that channel checks with retail buyers (not sellers) indicate that gross retail sales will decline by 20% in the fourth quarter.
Now, that's down 20% year-over-year, mind you. Last year around this time there was a frenzy in retail as Howard Stern's departure from terrestrial was only three weeks away. So a YoY decline of only 20% is actually, not too shabby. Considering the hype and hooplah that surrounded the industry in 2005, a mere drop of 20% is a good sign of the industry's strength in my opinion.
So let's take a look at some different areas of interest now that Black Friday and Cyber Monday are behind us. First, here's the Alexa traffic numbers during a 7-day period:
This shows that Sirius still leads XM in traffic, a look at a one-month period shows Sirius benefitting much more from weekday traffic than XM as well. Traffic can be inferred as a level of interest - not necessarily in sales, but in product research. Net-savvy users will research their options for their holiday shopping ahead of time. Sirius seems to be doing well.
A look at Amazon's Car Electronics best sellers shows satellite radio clearly dominating the category, with more XM products in the lead. Amazon's Satellite Radio category shows a similar favor towards XM. It's not all peaches and cream though, because satellite radio is no where to be seen in the Electronics category.
Looking at eBay's Consumer Electronics category shows a fair number of satellite radios being listed (nearly 6,000 items in total - the key would be to see this number grow in the coming weeks). The wearable/handheld units seem to be the most popular on eBay, which is really no surprise.
Now ShopperTrak estimated that Black Friday sales were up 6% from last year, but it was flat-panel TVs and computers that dominated the consumer electronics category. Unfortunately "Cyber Monday" ended up being a bust... well, not a bust necessarily, but just yet another holiday shopping day. While Microsoft's Xbox 360 Core sold out in 30-seconds for Amazon's door-buster campaign; the much hyped (and ugly) Microsoft Zune is falling fast on sales charts. There's a lot of competition this season for satellite radio, and nothing is a guarantee.
Remember, last year SIRIUS added 1,142,640 net subscribers and XM added 898,315 net subscribers in the fourth quarter (Gross Subscribers: 1,266,674 and 1,373,876 respectively). During the same period SIRIUS added 900,645 net retail subscribers, while XM added 782,420 net retail subscribers. So a 20% hit in retail - if equally applied to both XM and SIRIUS - would mean an estimated 720,516 net retail subs for SIRIUS, and an estimated 625,936 net retail subs for XM.
As a reminder, to meet guidance SIRIUS needs to add 1.18 Million net subs, and XM needs to add 515,000 to 715,000 net subs.
In my humble opinion, I would like to see XM give exsisting subs a very nice deal on radios. THey are going after the new subs which is understood but they should throw in a very sweet deal for longtime listeners. Like last years $99.00 Myfi deal.
I spoke to a few sales people at Radio Shack who said portable is best seller but sales overall down so far this year from last, as would be expected.
BB and CC said more Sirius being sold then XM, but it is early yet
Check out the lowest price ive seen so far for the Stiletto--Skybox USA has one day sale at $299(plus free home kit with rebate)
I don't see how Sirius can be planning on adding more net subs than last year when gross additions will be, by all accounts, lower, *and* Sirius will finally have to battle the kind of churn losses that come with a larger subscriber base.
For all the talk of XM being on the mats this year, I believe they still get a consistently better gross adds figure (long-term, the indicator of how large a company can get if churn stays constant) and they bleed money somewhat less obscenely. If those trends continue, and it's shown that XM was lowballing their guidance while Sirius was half a million too optimistic with theirs, I think we might see a shake-up as far as who the "smart money" likes in this horse race.
Also, it bears pointing out that if Stern really drove that many subscription buys last year, the 20% drop-off will NOT be felt equally by both companies.