According to the J.D. Power and Associates, growth in consumer demand for high-tech features in new vehicles has led to a significant increase in market penetration for satellite radio and navigation systems. The 2008 Multimedia Quality and Satisfaction Study, released today, found that 55 percent of new-vehicle owners report having satellite radio capability in their audio system.
That's up quite a bit from just 39 percent at year ago.
"New-vehicle buyers are looking for the latest technologies in audio systems, and the presence of features such as satellite radio and navigation systems will only increase as manufacturers try to meet consumer demand," said Allison LaDuc, senior research manager of automotive product quality at J.D. Power and Associates.
Market penetration for navigation systems has also increased - up to 25 percent in 2008 from 20 percent in 2007. Additionally, nearly 60 percent of consumers say they want a navigation system on their next vehicle, said LaDuc.
Competition on the dashboard is mounting though. LaDuc added that 66 percent of consumers say they want the ability to play MP3 files.
"To meet or exceed consumer expectations, manufacturers will need to focus on incorporating high-tech features in multimedia systems while avoiding increases in problem levels," said LaDuc.
The 2008 Multimedia Quality and Satisfaction Study is based on responses from 81,530 new-vehicle owners who purchased a 2008 model-year vehicle. The study was fielded between February and April 2008..
[CNN Money]
Thanks Len & Jon!
i'll bet bubba the love sponge is behind this current upswing.we all know he has the ear of powerful ceo's, they all do his show
Satellite Radio wins, HD Radio loses...buy-buy
speaking of penentration. i hear bubba will star in "the hills have guys 2: the search for more guys" what a cupcake he is
ooooo you said penentration-that reminds me of my daddy
Now the positive articles so the stock can rise and the big boys who downgraded & shorted can make even more $.
It will be a $5 stock in 2010 sometime if investors have the patience to wait around for the synergies to be shown, proven and the last bit of refinancing debt obligations coming throughout the 2009 year.
When I think of penetration, it's how many subscribers sign up for the service vs how many units are installed in the car.
Everyone should know that they install satellite in more cars (duh!), it's the percentage that sign up that interests me.
I know that my wife and I bought the top of the line models of our Honda's so that we would have the navigation AND THE XM already installed. I have NEVER set the FM presets in my 2006 Honda Civic Si since the day I got it brand new. Why waste my time with doing it, I'm not going to listen.
Satellite radio needs this boost, as long as the subscription rates are reasonable, it just might survive.
Awe crap, almost forgot.......RON AND FEZ, NOON TO THREE !
This is unbelievable - up two day in a row. Let's do the math, two days ago it closed at 1.39, and today its at 1.44. Up a whole five cents or 2.5 cents per day. Amazing. And what the strangest part is that it is still below the merger approval announcement price. Damn, what a hell of a pop.
Wait, now's the time for someone to tell me that te whole market is doing badly.
I know it's coming.
So folks, keep loading up those cars with GPS - just make sure there is an aux input - cause that's what people really want.
What does this tell us other than the sat radio's are installed?
"55 percent of new-vehicle owners report having satellite radio capability in their audio system. "
I'd pay more attention to:
"66 percent of consumers say they want the ability to play MP3 files."
"60 percent of consumers say they want a navigation system on their next vehicle"
The posted article doesn't show demand for satradio at all.
"To meet or exceed consumer expectations, manufacturers will need to focus on incorporating high-tech features in multimedia systems while avoiding increases in problem levels," Which is why BWM, FORD, HYUNDAI, JAGUAR, LINCOLN, MERCEDES-BENZ, MERCURY, MIMI, SCION, VOLVO and others are moving ahead with HD Radio.
HD Digital Radio • IT’S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
Speaking of GPS, those are flying off the shelves everywhere I look.
GPS outsells satellite 40:1 easy. Maybe, just maybe SIRI/XM will smarten up and incorporate them in GPS. I know XM had a few Garmin units, but these guys need to step it up.
On average Sirius/XM combined for 50% take rate from free trials, so that's where the 4 million new subs come from (8 million installs/2)
The issue becomes churn.
Let's say 20% churn rate starting in Q3 dorward, you are looking at 4 million churning out, so no new net subs.
But then if you add 2 million aftermarket or retail, there is your increase.
Each year churn as a number would go higher as sub base increases, so you need retail to increase the sub base unless penetration rates can continue climbing higher and/or churn rates drop.
Cross content across networks and no longer having content like Nascar switching, Stern type content being added will all reduce churn % in my opinion. You have already seen XM's numbers improve over last few quarters. I think Sirius showed some improvement as well.
Sorry, the 20% churn rate (4 million) I mentioned was for the full year statring in Q3 '08. Of course the gross sub# that churn % calculates off is ever changing.
We really need a spark at retail to add net subs at a more decent growth rate in the next few years.
J.D. Power and Associates Reports:
Premium Surround Sound Systems and HD Radio Garner High Consumer Interest Based on Their Market Price, While Consumers Prefer One-Time Fee Over the Monthly Fee Associated with Satellite Radio
WESTLAKE VILLAGE, Calif.: 18 August 2005 — Premium surround sound systems and high-definition (HD) radio are highly attractive features consumers would like to see in their new vehicles based on their estimated market prices, and consumers prefer to pay a one-time fee over a monthly subscription for satellite radio, according to the J.D. Power and Associates 2005 U.S. Automotive Emerging Technologies StudySM released today.
The study measures consumer familiarity, interest and purchase intent for emerging automotive technologies both before and after an estimated market value is revealed. While consumer interest in new technologies typically drops after a price point is revealed, relative interest in premium surround sound and HD radio actually improves dramatically after the market price is provided. Premium surround sound, which ranks sixth in consumer interest before the price is revealed, moves to second after consumers learn its market price ($400). With a realistic market price of just $150, the HD radio-compatible receiver jumps from 16th in initial interest to third after pricing is revealed.
“What is truly surprising is that among those interested in equipping their next new vehicle with the premium surround sound feature at $400, nearly 80 percent of those are willing to pay $800 for a branded system,” said Lawrence Wu, senior director of automotive emerging technologies at J.D. Power and Associates. “This suggests that automakers and audio suppliers could add value to their products for consumers, while increasing their returns. While we have seen the availability of branded sound systems increase the past few years, it’s evident from this research that there is sufficient consumer demand to warrant equipping a much broader vehicle segment base.”
Consumers still express more interest in satellite radio than HD radio prior to the introduction of price, but interest falls below HD radio at the realistic market price of $12.95 per month for satellite radio. The study shows that more consumers are willing to pay a one-time fee as opposed to paying monthly for the service.
“Even though satellite radio is at an advantage over HD radio by offering commercial-free content and coast-to coast coverage, interest in HD radio is higher than satellite radio after the introduction of price,” said Wu. “In general, consumers would rather pay once for a feature and have been reluctant to embrace subscription fees. This is evident in the trade-off exercise in this year’s study in which almost twice as many consumers chose lifetime (life of vehicle) satellite radio with a one-time $499 subscription fee compared to a one-year option.”
http://www.ibiquity.com/i/JD%20Power%20Emerging%20Technologies%208-18-05%20(2).pdf
Just a note: Anonymous Coward called me a liar, which I felt wasn't fair, so I responded in kind in another thread. I want to make sure he reads it, so I'm posting it to this one.
****
I'm not lying - and I'm not name-calling with you anymore. How about an open and honest discussion on the topic instead. Fair?
I paid for a lifetime subscription to Sirius - it cost me $399. The Sportster was free in the deal. At the time, it was the price of an iPod. My feeling on the matter was that I have a 45-minute commute to work every day. I don't have either the time or the patience to continually pay for new music, download to iTunes, push it over to my iPod. And I really dislike listening to commercials - they really annoy me.
So I bought Sirius - mainly because I heard that a) XM has more commercials, and b) I like listening to Howard Stern. As a subscriber, what I've found is that Sirius is actually much better than advertised. I have 30 artists preset into my receiver, and whenever one appears on a channel, an alert pops up. This happens, on average, 8 times on my way to and from work. It's a virtually unending playlist of my favorite artists. And when it does end, I can browse the other channels easily and find something else to listen to. I don't know much about the Blues, but I listen to Pat St. John every day because he does, and he creates playlists that seems to blend in well with one another. So if I find myself on that rare occasion with nothing to listen to, I tune in to him, and enjoy myself further.
Now let's think about that for a second, in the context of the iPod argument. 30 artists. Say, they have 4 albums apiece. In order to assemble a playlist of all of their music, I'd have to purchase about 1,200 songs (at 10 songs/album). For $399, I have access to their entire collections, as well as thousands more - of which music experts from each genre hand-select individual songs to add to a playlist.
And no. I haven't heard a single commercial in 3 years. If you use the technology correctly, you never will. So if you don't like listening to the latest commercial pumping "Ernie Boch Jr on the Automile" do yourself a favor and plop down $500 on a new lifetime sub + receiver, and never think about it again.
Otherwise, if you're interested in listening to good local content (the only thing SatRad is missing, IMHO), turn the dial, have a good time - I have no issues with people who want to listen to local content on the radio. It's just not for me.
Sirius XM Radio isn't for everyone, but it's certainly a great product - much better than you're describing it. Hell it's even better than I'M describing it. It's phenomenal, in fact. There's always something for everyone, and it rarely loses reception, even on long cross-country drives.
Just one man's opinion. No lies. Just facts.
How about instead of giving us these fancy, integrated car stereos that are impossible to upgrade or modify, the car makers give us
* More empty space on the dash with removable panels that allow multiple DIN-sized units to be installed
* A single, industry standard form-factor for the radio
* A single, industry standard connector for the radio that includes all the necessary inputs and outputs
* a common control architecture that would allow any aftermarket radio to be used with steering wheel controls or voice control
* a common digital audio bus that can be used with multiple devices and automatically detects and configures new equipment (that would be installed in the empty bays mentioned above)
Intead of throwing these overpriced, crappy stereos in the cars, and instead give us a plug & play equipment rack that we can drop our own stereos in to. Give us 2 bays up front and 3 or 4 hidden bays behind the glove box. Then we could connect SAT receievers, GPS units, DVD players, iPods, mobile phone integration units (you like how Bluetooth is standardizing mobile phone interfaces?), and have room for future expansion.
It's not a hard concept. Quite frankly, I'm amazed that nobody has thought of this yet (or if they have, that it hasn't been done.)
I realize that some manufacturers think that they can make more profit off of prioprietary busses, but the fact is that with standards, everybody wins.
Owning my shares for three years with a basis of 4.00, I'd say if there were penetration, I've taken it in the ass for ever hearing the word Sirius. never again.
We really need a spark at retail to add net subs at a more decent growth rate in the next few years.
Posted by: JM | August 6, 2008 4:40 PM
No disrespect intended JM, but you have to understand that retail is not the business model of satellite radio. It's all about the OEM's. Retail is a simply a distant second to the main driver of the business.
Frank,
Why must you continue the lies and the spinning?
Okay, I guess that proves it, you're a shill for the NAB. I was completely honest with my reasons. You're just antagonistic, there's no truth to your postings, whatsoever. And that's too bad, I actually was willing to learn about HD Radio.
Frank- I think you are clueless!!
Growth of high definition radio developer iBiquity Digital triggers move to Auburn Hills
by Carol Marshall | Oakland Business Review
Thursday August 07, 2008, 6:20 AM
iBiquity Digital Corp.'s Michigan automotive sales office is growing fast as it projects a surge in demand for high-definition, or HD, radio. Growth expectations triggered the company's move from its Pontiac office to a larger space in Auburn Hills.
iBiquity is the developer of HD radio technology, which it licenses to radio manufacturers such as Delphi, Visteon, Alpine, Kenwood, Yamaha and Panasonic.
The number of HD radio stations grew from 11 in 2002 to 1,500 in 2007, creating demand for receivers. Some manufacturers' HD radio receivers' prices have dipped to the $100 neighborhood, putting them in a position of being able to market to a wider range of buyers. Radiosophy began selling a receiver for less than $50 and Coby produces a tuner for less than $100. Receivers are available at retailers such as Best Buy and ABC Warehouse.
Thus, iBiquity, with 2007 sales estimated at $9.3 million by Hoovers Inc., vaults into a position to market itself to a broader audience.
Here in Michigan, the Columbia, Md., company has put a strong focus on automakers and the automotive aftermarket. Ford Motor Co. in January announced that starting in 2009 it will include HD radio technology in its Ford, Lincoln and Mercury vehicles. The company now offers HD radio receivers as dealer-installed options on most of its vehicle.
BMW was the first to offer it as a factory-installed option, and was followed in 2007 by MINI USA. Scion and Mercedes have announced that HD radio technology will be included in those vehicles, and Jaguar, Hyundai and Volvo are offering or including it as standard.
Jeff McGannon, iBiquity vice president of OEM business development, calls the auto manufacturers partners, although none of them are direct customers.
"The majority of my group's job is to work with the automakers and help them deploy HD into their radios in a much quicker time frame," McGannon said. He described HD radio as CD-quality sound, while listeners who have digital radios can listen for free. There are 23 stations in Michigan that broadcast in HD radio now, and 16 of those are multicast stations.
"Multicasting simply means that a radio station can have its main station, like '98.7 Smooth Jazz,' and can also have its HD radio station, which is 98.7 HD2. On that station, they broadcast what I call true jazz. And WRIF has its main station, then WRIF HD2, which has more local content bands," McGannon said. "That gives them a real cool ability to program some real content."
iBiquity launched digital radio soon after, improving AM signals and allowing FM stations to broadcast up to four channels on the same frequency.
Since 2002, when the first HD radio stations began airing programming, iBiquity has had no competitors in the United States and was selected by the FCC to develop a digital system for AM and FM broadcasting, McGannon said.
The National Association of Broadcasters followed iBiquity's lead and lobbied car companies and radio retailers to put digital radios in cars and on store shelves, with some success.
Station managers and owners are promoting digital radio.
Kernen believes, as more stations provide special programming on the digital frequencies available to them, that it won't take long before consumers do tune in and start to buy receivers and bring the price down further.
Advertisers could follow, as they have done for specialty cable television programming, which enables them to market to target audiences who watch shows on stations such as Home and Garden Television.
"If you're Lowe's or Home Depot, you won't get the audience on HGTV that you would advertising during 'Desperate Housewives,' but those viewers watching Home and Garden are a goldmine," Kernen said.
As radio stations market digital content, McGannon said his vision is for all radio - digital and analog - to just become digital.
"My goal is for no one to have to ask to buy a digital radio. They'll just buy a radio, much the same way no one ever asks to buy a color television. They just buy a TV," McGannon said.
Though HD radio isn't at that point yet, and isn't going to reach that point in the immediate future, it is still growing fairly rapidly, particularly in the last three years.
"In 2000, we had no one in Detroit. We started with a small staff of three people, and now we're up to nine, and we'll add a couple more this year, and next year we'll add three to five people to our staff," McGannon said.
To keep up with the growth, the company is moving from its office at Centrepoint Parkway in Pontiac, where it has been for five years, to 5,000 square feet in Concorde Center at 691 N. Squirrel Rd. in Auburn Hills.
"This company could be huge," said Matt Osiecki of CB Richard Ellis, who represented iBiquity in its five-year lease. "They're not necessarily auto related so they're not as affected by the local economy as much. They don't manufacture here - it's service based. And everything is going HD so this company is going to grow."
HD radio is for queers.
...and peefreaks
so how long now have you been into HD radio pfreak??
@Anonymous Coward: you are BREAKING THE LAW by posting entire articles here. I hope you realize that.
@SatelliteRadioFan: That's really too bad. Those of us who will never own a new car don't have much hope when it comes to finding hardware in a retail store. I was introduced to XM by a display at a Wal-Mart, and my first receiver came from (I think) Best Buy. Personally, I don't want an OEM radio, since the plug n play receivers have more functionality than any in-dash model ever has. My SkyFi has the 30 minute replay (which I love & use all the time), and my Nexus is great for recording my favorite radio shows & listening to later.
Having said all that, there is one thing I like about the in-dash models: I have an XM Direct that I've plugged directly in to my computer, and I use it to record shows from Sonic Theater. I then drop them to my iPod and listen to them on my schedule.
True, it's easier to acquire a customer through the OEM channel, but if they ignore the retail channel, Sirius XM stands to lose a lot of potential customers.