Satellite-radio subscriptions might be driven by a desire for in-vehicle entertainment, but satellite-radio subscribers frequently listen to satellite content at home and at work, one study found.
In a recently released study, the Council for Research Excellence (CRE) found that, in total, satellite-radio subscribers listened to satellite radio 29.5 percent of the time at home, 23.1 percent of the time at work, and 21.4 percent of the time in the car.
The percentages exclude satellite-radio programming streamed through the Internet or through satellite TV, so the incidence of listening to satellite-radio programming at home or at work could be higher, CRE told TWICE.
For the study, released late last year, CRE used financing from The Nielsen Company to send people into the field in 2008 to observe the audio listening habits of consumers in five markets: Atlanta, Chicago, Dallas, Philadelphia and Seattle. Total observation time came to 750,000 minutes, CRE said. The study captured listening to broadcast radio, satellite radio, Internet radio, portable audio devices, CDs and cassettes, and PC-stored audio.
Though the methodology is limited, CRE admitted, “as the only-single source dataset of observed consumption of audio and other media exposures, this study does offer a wealth of insights to audio use.”
CRE found strong rates of home and workplace listening even though, for the first time in 2008, the year-end installed base of subscribers paying for a subscription tied to a factory-installed car radio (10 million) exceeded the installed base of subscribers who purchased a subscription tied to a satellite tuner purchased at retail (8.9 million). Many of the retail-purchased tuners were the type that could be shuttled from car to home and work.
Despite the dominance of OEM subscriptions, listening at home or at work could have been high in the study in part because “those who have satellite radio at home and work leave it on, and thus are [more] exposed to this source,” said Dr. Michael W. Link, Nielsen's chief methodologist. “In a car we're more focused on the fact that we're listening to this source. In the home or at work, our attention likely goes in and out over the course of the day. So if you were to compare these observational results to self-reported data, folks might self-report that they listen more in the car than at work or home, when in reality they may simply have had greater focus on satellite radio in the car.”
In the future, however, listening to satellite-radio programming at home or at work (outside of Internet streaming) could decline as a percentage of total listening because the number of retail subscriptions is falling, while OEM subscriptions are rising.
By Sept. 2009, Sirius/XM reports show, the subscriber base consisted of 10.5 million OEM subscribers compared to 7.9 million retail subscribers.
By the end of 2015, Wunderlich Securities forecast in a January 2010 report, OEM subscriptions will number 16.9 million compared to 6.6 million retail subscriptions, given the growing penetration rate of satellite radio in OEM car audio systems.
A January forecast by Lazard Capital markets shows a similar OEM skew (see chart). The company estimates that satellite radios were built into 53 percent of new cars sold in the U.S. in 2009 and forecasts a 2010 62 percent penetration rate that will continue long term. By 2015, the number of cars on the road with satellite radio pre-installed should be more than 70 million, or more than a quarter of what by then should be more than 250 million cars in the U.S., Lazard's report said.