Satellite Radio Retail Sales Continue to Decline
Wednesday, November 15, 2006 at 2:27 PM
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NPD Group's October sales data continues to show a consecutive decline in the satellite radio retail channel, when compaired to the same period last year. This is the third month in a row that retail sales are down year-over-year. August was down 3%, September down 12% and now in October retail sales are down 25% industry-wide when compared to the October last year. The Quick Glance:
- Sirius October 2006 Retail Sales:
Down 26% YoY - XM October 2006 Retail Sales:
Down 23% YoY
Marketshare:
- Sirius Oct '06 Retail Marketshare: 56%
- XM Oct '06 Retail Marketshare: 44%
Looking at purely the numbers, this supports the argument that the satellite radio retail channel has reached it's peak, but that only comparing the year-over-year numbers. Expecting the same - or greater - growth as last year is completely unrealistic. This is also the first time since April that Sirius didn't see better year-over-year growth, percentage wise, than XM. The Stern Effect was in full swing at this time last year, so again it's unrealistic to expect the same growth this year. I don't care what the skeptics say, it's just not possible.
2005 was a breakout year, and ridiculous money was being spent in order to maintain the momentum. This helped growth (gotta spend money to make money). From one side the critics say that satellite radio needs to control costs, from the other they say it needs to add subscribers. The key is finding that sweet spot somewhere in between.
That said, Sirius still expects to bring in more subscribers this Q4 than they did last Q4. They've reiterated their year-end guidance of 6.3M net subscribers, so they're obviously confident that they can pull it off. I'm just not exactly sure how.
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Comments
Doesn't it make sense that the more OEMs install XM and Sirius, the less reason a consumer has to buy a sat radio? If it comes in the car, and you can listen on DirecTV (XM) or Dish (Sirius), do you need to buy a radio at retail? I think the retail sales will continue to decline as OEMs install more sat radios.
I remember my 1987 Alpine CD player that I had installed in my 1983 SAAB. It was very expensive ($600). Now, they are standard in most cars -- I guess those CD players saw a decline at retail as well.
Posted by: iband | November 15, 2006 2:43 PM
in 2003 Sirius had a target of 300,000 subs. late in the Q they revised guidance down to 280,000. that being said. Holiday Sales will come by the buckets from December 24th on till the end of the year when most of Q4 subs sign up. Take Sirius for example. Last year at this time they were signing about 2000 a day. On december 25th they and XM both hit well over 25,000 in a single day. With that in mind. its going to be difficult to accuratly predict sub numbers unless you have gnoe through it several times before and sirius has not. I expect a revision down for sirius sometime in december.
Posted by: jeff | November 15, 2006 3:02 PM
I will go out on a limb here and make a prediction. Actually 2 of them
#1 XM will net 680,000 subscribers for Q4 2006
#2 Sirius will net 928,000 subscribers for Q4 2006
Posted by: jeff | November 15, 2006 3:14 PM
I don't focus on XM so all I know is that Q4 is going to be another bllodbath for them it seems.
What I DO know is that no one is counting or considering the impact of the Internet trial OR the free radio offer.
I would be shocked if Mel misses his numbers. He hasn't so far in 2006 !
We shall see.
Posted by: pockpie | November 16, 2006 3:15 PM