XM: NPD data is increasingly "less relevant"

XM Satellite Radio Holdings Inc. said on Thursday that data reported by the NPD Group has become increasingly less applicable in showing the company's retail sales performance.
"NPD data is less relevant today than it was five to three years ago," said CEO Nate Davis. "We no longer use NPD as a lead indicator in the after-market."
"We estimate that when we launched our service... NPD measured over 70% of XM's retail sales. In 2007, we estimate that NPD represents less than 40% of XM Satellite Radio's retail sales.
"Roughly 60% of our sales come from direct or non-NPD reporting channels."
The company told investors that a key focus for XM's aftermarket segment is to grow direct internet sales volume. Other retail opportunities include customer service sales and cross-selling promotions with automotive partners.
"XM has consciously worked to grow these more cost-effective means of retail distribution, which is one of the important reasons why our retail [subscriber acquisition] charges are well-managed and why our quarterly retail gross adds are consistently higher than NPD reporting outlets would suggest," said Davis.
In the fourth-quarter of last year, XM reported that it added 364,000 gross retail subscribers which resulted in an additions of 99,000 net retail subscriber to its base.

Comments
NPD Data is becoming less important because XM is becoming less important. Period. End of Sentence! No one is buying their product. Anything you multiply by zero is zero.
So they are trying to grow their direct sales to customers? That is great but do you see any problems arising from the fact that the average person canNOT install their mismatched hardware by themselves? Why do you think the majority of satellite radio sales come from Best Buy and Circuit City and other stores that have the ability to install the products they sell? Also what happens when their product goes bad? They have to ship it back out to XM, wait for a replacement piece, wait some more, finally get mad and then cancel service.
In my opinion it is much more reassuring to be able to drive to a store that sold me the product and have them handle the warranty or any problems I may be having instead of talking to someone in a call center who just wants to get me off the phone.
Still, the weak FM Modulators have really forced satellite radio receivers to be installed by someone who knows what they are doing. Not to mention most vehicles will require extra parts (antenna adapters) when installing. Can you imagine when
Don't get me wrong I think it is a good idea to focus their selling where costs are the lowest.
Posted by: HeyThereGuy | February 29, 2008 8:57 AM
In other words the closer they get to being bankrupt the less the numbers are relevant.. I see..
Posted by: Anonymous Coward | February 29, 2008 9:09 AM
NPD got over 60% of the retail number in q4 from what i have read.
Posted by: Patrick | February 29, 2008 11:15 AM
Back of the envelope calculations indicate that Sirius had around 430k gross retail adds, so the retail share breaks down to a 54/46 split. FYI.
Posted by: leviramsey | February 29, 2008 11:57 AM
Heythereguy said,
>>>NPD Data is becoming less important because XM is becoming less important. Period. End of Sentence! No one is buying their product. Anything you multiply by zero is zero.
A bit of a correction for you... actual Retail Gross Activations through the first 9 months of 2007 was between 50~55% for Sirius and 45~50% for XM. These numbers are confirmed.
For this past Q4, as Leviramsey estimated -- I come up with approximately 54-55% for Sirius too. Full year split is in the neighborhood of 54% for Sirius and 46% for XM.
Meanwhile, NPD has consistently pegged the split at 64% for Sirius and 36% for XM... as you can tell, their estimates are not even close to what is actually happening where it matters most -- Retail Activations.
Furthermore, a split of 54% to 46% is not an indication of XM "becoming" less important or that "no one" is buying their product. In fact, it indicates tight competition, IMHO.
Posted by: homer985 | February 29, 2008 2:08 PM
best buy/circuit city are the worst possible places you can go to get SDARS. There's not a single person in any of the stores that are trained or have any idea what they are talking about with these products. They have awful displays and poor accessories. I couldn't even get an a/c adapter @ BB. It's not hard by any means to install a car kit yourself. If you can't then you need a hardwired solution not a PNP. Paying Best Buy to instal a PNP is idiotic. Anything that you buy at a big box retailer can be had online for less, much less. In fact you'd do better following a link on this site than going to a retailer. I bought my first receiver at Circuit City and my next 11 through online retailers that NPD don't count. That's the point.
Posted by: pfreak | February 29, 2008 2:41 PM
homer985
These are the numbers i read. Does not break down share, but gives what part of XM is being reported by NPD
http://siriusbuzz.com/forum/showthread.php?t=349
Posted by: Patrick | February 29, 2008 2:53 PM
Patrick said,
>>>These are the numbers i read. Does not break down share, but gives what part of XM is being reported by NPD
It doesn't matter what numbers NPD "gives" -- all that is relevant are the number of Retail Activations. That is the true measure of who is becoming subscribers -- and "popularity" -- not NPD numbers. XM uses a number of outlets for receiver sales that are not tracked by NPD (as does Sirius too). That is why, the best way to track what is "popular" or "selling" is by tracking the number of new retail customers coming in.
During 2007, the number of new retail subscribers was split approximately 54% for Sirius and 46% for Sirius. Touting NPD's 64% is very misleading.
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Posted by: homer985 | February 29, 2008 3:11 PM
Please don't quote SiriusBuzz.com
for anything....
EVER.
Thank you.
Posted by: xzi | February 29, 2008 10:59 PM
If I remember correctly, NPD data doesn't include sales from Walmart and Sams Club.
Posted by: Steve | March 1, 2008 7:37 AM