Emerging Technologies - Satellite Radio - US
Published By: Mintel International Group Ltd.
July 2004
R560-1210
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Description
| While the concept for satellite radio began development in the early 1990s, consumers were not introduced to the technology until 2001. Since that time, satellite radio has grown as a result of the efforts of two firms-XM Satellite Radio and Sirius Satellite Radio. Both firms were scheduled to launch in Fall 2001, but Sirius was delayed for eight months due to chipset conflicts. Total industry subscription sales reached $91 million in 2003, and are expected to reach $227 million in 2004 and $3.1 billion by 2009, according to Mintel estimates.
XM announced in the second quarter of 2004 that it had amassed 2.1 million net subscribers. While Sirius had not released 2004 second quarter data during the review period, first quarter net additions for the company in 2004 totaled 91,000 subscribers. While Sirius has gained a significant stake in the market, XM remains the strongest player in the market, adding 320,000 in the same time period. In late July of 2004, XM and Sirius reported approximately 2.1 million and 500,000 subscribers respectively, bringing the total market to 2.6 million subscribers. Market shares in the satellite radio market frequently fluctuate from quarter to quarter.
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Table of Contents
INTRODUCTION AND ABBREVIATIONS
Introduction
Other relevant reports
Definition
Satellite radio channel definitions
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The satellite radio market
Collaboration and innovation have fed market development
Future relies on critical mass of subscribers
XM leads, but Sirius is following strong
What's ahead
MARKET DRIVERS
Introduction
Broad content is key
Narrowly defined station formats spark consumer interest
Satellite radio is an ongoing investment for consumers
Figure 1: Subscriber data collected by XM: self-reported income of XM subscribers, 2003
Additional customers come at a cost
Figure 2: Cost per gross addition, 2002-2003
Attracting and maintaining the confidence of marketing partners is crucial
Figure 3: Number of manufacturer partnerships, 2004
Satellite radio and competitive content formats
Figure 4: Online activities in the last 30 days, 2003
MARKET SIZE & TRENDS
Figure 5: Total U.S. subscription sales of satellite radio, at current prices, 2001-2004
MARKET SEGMENTATION
OEM, retail and rental car segments
Figure 6: Net subscriber additions, segmented by channel, 2002-2004
OEM
Figure 7: Net OEM subscriber additions, 2002-2004
Details on the OEM Segment
Retail
Figure 8: Net retail subscriber additions, 2002-2004
Details on the retail segment
Rental car
Figure 9: Net rental car subscriber additions, 2002-2004
SUPPLY STRUCTURE
Introduction
Figure 10: sales of satellite radio service in the U.S., by manufacturer, 2002 and 2003
XM Satellite Radio
Sirius Satellite Radio
ADVERTISING AND PROMOTION
Figure 11: Marketing expenditures for XM and Sirius, 2001-2003
Strategic partnerships
Figure 12: XM and Sirius strategic partnerships, 2004
Sirius
XM
RETAIL DISTRIBUTION
Introduction
OEM
Figure 13: Satellite radio auto maker partnerships, 2004
Electronics stores and other retailers
Figure 14: Where car audio equipment was purchased, April 2003
Supplier partnerships
Figure 15: Satellite radio hardware manufacturer partnerships, 2004
THE CONSUMER
Introduction
Early lifecycle portable electronic products (ELPEP)
Satellite radio subscribers
Figure 16: Incidence of owning a satellite radio or at least one ELPEP, May 2004
Figure 17: Incidence of owning at least one ELPEP, by gender, May 2004
Figure 18: Incidence of owning at least one ELPEP, by age, May 2004
Graph 1: Incidence of owning at least one ELPEP, by age, May 2004
Figure 19: Respondents who own at least one ELPEP, by household income, May 2004
Graph 2: Respondents who own at least one ELPEP, by household income, May 2004
Figure 20: Incidence of owning at least one ELPEP, by race/ethnicity, May 2004
Graph 3: Incidence of owning at least one ELPEP, by race/ethnicity, May 2004
Figure 21: Incidence of owning at least one ELPEP, by household size, May 2004
Figure 22: Incidence of owning at least one ELPEP, by presence of children, May 2004
Consumer use of satellite radio and ELPEPs
Figure 23: ELPEP length of ownership, May 2004
Figure 24: Hours per week listening to satellite radio and MP3 players, May 2004
Overall product experience
Figure 25: Overall product experience, May 2004
Intended satellite radio purchases
Figure 26: Technology adoption status of consumers, May 2004
Figure 27: Early adopters and early majority consumers, by age, May 2004
Figure 28: Early adopters and early majority consumers, by household income, May 2004
Figure 29: Incidence of intention to buy an ELPEP in 2004, May 2004
Figure 30: Incidence of intention to buy an ELPEP in 2004, by age, May 2004
Graph 4: Incidence of intention to buy an ELPEP in 2004, by age, May 2004
Figure 32: Incidence of intention to buy an ELPEP in 2004, by race/ethnicity, May 2004
Graph 5: Incidence of intention to buy an ELPEP in 2004, by race/ethnicity, May 2004
Summary
Current owners
Early adopters and early majority consumers
Intent to buy ELPEP and satellite radio in 2004
FUTURE & FORECAST
FUTURE TRENDS
Expansion of offerings
Evolution in OEM offerings
Convergence of AM/FM with XM and Sirius in aftermarket stereos
MARKET FORECAST
Overview
Figure 33: forecast of U.S. subscription sales of satellite radio, at current and constant prices, 2004-2009
XM subscription sales forecast through 2009
Figure 34: forecast of U.S. subscription sales of XM Satellite Radio, at current and constant prices, 2004-2009
Sirius subscription sales forecast through 2009
Figure 35: forecast of U.S. subscription sales of Sirius Satellite Radio, at current and constant prices, 2004-2009
Changes in the forecast
APPENDIX: CASE STUDY OF THE MARKET FOR CABLE TELEVISION
Figure 36: Cable television penetration, 1970-2004
APPENDIX: TRADE ASSOCIATIONS
APPENDIX: RESEARCH METHODOLOGY
Consumer Research
Sampling & Weighting
Presentation & Definition
Further Analysis
Trade Research
Informal trade research
Formal trade research
Desk & Internet Research
Sources
Definitions
Forecasts
APPENDIX: WHAT IS MINTEL?
Mintel Publications
Mintel Services
Product retrieval
Retail audits
Tailored research
Global New Products Database
Research Support/Consultancy/MIC
The Mintel Information Centre (MiC)
PR Research
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