Since April of last year, Bridge Ratings has shown overall "brand interest" in satellite radio to be on a significant decline - as is obvious from the above graph - but the good news is that in the latter part of Q2, consumer interest has improved.

After a slight uptick in interest during 4Q06, interest in satellite radio among consumers fell to its lowest point this spring - falling below the 5.0 point for the first time ever. (see chart) A "Brand Stimulation Score" of 4.8 indicates that as a group, those Bridge interviewed were just as likely not to consider subscribing as were.

The comps are difficult though: in the first half of '06, the average Brand Stimulation Score was 7.3, assumably as a direct result of the Stern Effect. The "brand stimulation" then slid to 6.0, reflecting the soft consumer interest during the middle part of 2006. And though the full Q2 average fell to 4.7, Bridge's numbers show a flattening occurring. As Bridge puts it, "It is possible that consumer apathy for satellite radio has bottomed out."

Bridge's study also shows that consumer hestitation due to the pending Sirius-XM merger has dropped significantly as well.

Bridge Ratings Q1 data indicated that 52% of potential subscribers would wait longer than previously expected before subscribing thanks to the merger. But their Q2 data shows that number has dropped to 40%.

The key takeaway here is that satellite radio appears to have lost its original appeal, but is showing signs of recovery (during a generally slow time of the year even). This is good news, but how do they stimulate this momentum further? One big factor, in my opinion, is the style and design of satellite radio retail products.

It's the overall experience of the medium that ultimately drives recommendations from friends (aka word-of-mouth) - which leads to consumer interest - and that includes the clunky device sitting atop your friend's dashboard.

[Bridge Ratings]