Satellite subscriptions in the US are predicted to rise to nearly 50 million by 2014, according to Kagan Research’s new Satellite Radio Outlook 2005 report.
The group attributes the increase in growth to a combination of factors, including growing consumer interest, new programming and agreements with automakers. According to Kagan, these factors will result in satellite radio subscriptions reaching 46.8 million by 2014, generating revenues of $7.6 billion.
The two primary satellite manufacturers in the US, XM and Sirius, have won a variety of new and renewed contracts with car manufacturers. Ford Motors has renewed its commitment to Sirius, while Hyundai is installing XM radios in all of its new vehicles.
Kagan estimates that by 2014, satellite radios bought by the automotive sector and customised for their brand will make up 75% of new subscribers to the medium.
The report also projects advertising expenditure from satellite radio to increase by over $800 million over the next nine years, to a massive $854.4 million by 2014, up from just $27.9 million in 2005.
However, Kagan asserts that no technology is beyond competitive pressures, with Kagen analyst Michael Buckley warning: “As wireless technology expands and access to free music websites and on-demand services increases, satellite radio will lose potential customers to alternative sources in the battle for consumers’ attention.”
In the US, satellite radio is predicted to reach more than 20.1 million households by 2010, up from 4.5 million subscribers at the end of 2004, according to Forrester Research (see Satellite Radio To Reach Over 20.1 Million US Households By 2010).
Satellite subscriptions were shown to enjoy a 150% increase between 2003 and 2004, with Forrester’s report, The Future of Digital Audio, forecasting that nearly half of all US households with broadband and 30% of all US households, will be tuned into online radio by the end of the decade.
This research confirms earlier findings from market research firm In-Stat, who predicts satellite radio to enjoy massive growth in the US over the next few years, with an estimated 9 million new subscribers by 2008 (see Digital Radio Forging Ahead).
However, a recent survey from The Media Audit claims that satellite radio is actually failing to attract the expected audiences in the US, with the medium performing poorly in terms of penetration rates (see Satellite Radio In US Fails To Penetrate Markets).
From a total sample of 117,737 respondents, only 571 adults aged 18+ said they listened to satellite radio at least once in the past seven days. Bob Jordan, president of the firm that produces The Media Audit, International Demographics Inc, said: “We were surprised at how little market penetration has been achieved by satellite radio.”
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