Let’s try to put Satellite Radio’s impact on broadcast radio in perspective 10 years after the advent of XM Satellite Radio. Many have viewed Satellite Radio as “the flea on the elephant.” However, Satellite Radio appears to be yet another viable medium that negatively impacts time spent listening (TSL) to broadcast radio.
Scarborough reports 9% percent of the American population listened to Satellite Radio in the previous week. The question then becomes what percentage of TSL does Satellite Radio garner? Arbitron did a study of Satellite Radio’s TSL in 2006 concluding that 3.4% of all credited Quarter Hours went to Satellite Radio.
More recently, Bridge Ratings reports that the average Satellite Radio subscriber spends 8.3 hours per week with Satellite Radio. Arbitron in their October 13th webinar revealed that 5% of car TSL was to Satellite Radio. Bridge Ratings reports loyalty indices for Satellite Radio are very high. Whenever I’ve spoken to Satellite Radio users, they’ve been uniformly enthusiastic about it. (Don’t you hate it when researchers cite anecdotal evidence?)
In the past few years Satellite Radio seems to have been left out of the equation when we talk about the percentage of audio service/stations listening that different platforms garner. Let’s try to correct that situation.
Jennifer Lane of Audio4cast places Internet audio (broadcast streams plus Internet Only services/stations) at around 3% of audio TSL.
So, doing some calculations
- 93% of the population listens to broadcast radio weekly on an average of 14.3 Hours per Week (Arbitron’s “Radio Today 2011”)
- 9% of the population listens to Satellite Radio weekly (Scarborough) an average of 8.3 Hours per Week (Bridge Ratings)
If you multiply those percentages by the TSL and then add back in Internet services that generate 3% of all broadcast plus Internet listening, it appears that the TSL percentages for the three platforms shake out to:
- 92% of all audio services to broadcast radio
- 5% of all audio services to Satellite Radio
- 3% of all audio services to Internet radio (broadcast streams plus Internet Only services/stations)
Ten years ago we were told that if Satellite Radio garnered 1% of all listening that they would be viable. It appears they have clearly surpassed that barrier. Satellite Radio is yet another, albeit small, audio alternative to the cost-free convenience of broadcast radio.
Interesting concept…we’ve been trying to figure out how to calculate any sort of TSL for satellite radio, but there really is no reliable source for the information. So no one has really much cared to find out.
In any case, here’s what we DO know: satellite radio hasn’t taken anything away from radio listening. Neither, pretty much, has streaming. We did an apples-to-apples comparison (separating out PPM markets and Diary markets), trending reach and TSL for the past 3 years. As a researcher, you know that up or down 5% for audience projections is pretty much considered stable, and these trend at less than 3% either way over the past 3 years (and remember Arbitron doesn’t really measure all station streaming yet). Edison/Arbitron’s Infinite Dial 2011 and two other researchers came to the same conclusion in studies they did this year.
Bottom line: it doesn’t matter what satellite radio does. It doesn’t seem to affect radio usage.
Zeb properly brings us back to the bottom line for Satellite Radio (as well as Internet Radio.) Yes, Sirius XM has posted modest profits since February 2010. Until researching this blog on Satellite Radio, I had thought of Satellite Radio as a black hole for investors. It appears it’s time for us to adjust our perceptions about the viability and impact of Satellite Radio.
Larry (a.k.a. ‘Lorenzo’) Johnson
Hay Lorenzo, 2 quick questions… has satellite radio ever posted a profit for any quarter?
If yes, have they posted enough profit to make them net profitable?