Satellite Radio and Advertising


radio

In a recent article posted by Automotive News, Sirius XM Radio Inc., the satellite-radio broadcaster boosted its forecast for 2012 subscriber gains to 1.8 million from 1.6 million. Fueled by a growth in auto sales this year, Sirius added 445,921 subscribers in the third quarter, bringing its total customer base to a record 23.4 million, the New York-based company said Wednesday in a statement. Is this a clear signal (excuse the pun) that consumers prefer the satellite-radio product over the traditional advertising-supported format? Are you comfortable with having your favorite radio, talk-back show, or music station interrupted by regular advertising messages?

I am personally OK with ad messages penetrating my listening pleasure provided they are relevant to me and do not dominate a radio broadcast. Do I represent the minority? Satellite radio is nothing new and Sirius has certainly endured growing pains in both adoption and finding a price model that results in a favorable cost-benefit analysis. Sirius relies on a paid subscription model (around $15 per month), but many of their stations are advertising free. Traditional FM radio is free but expect a certain amount of advertising messages to be aired during the course of an hour. What tickles your fancy?



The good news for satellite radio is that two thirds of new cars now come equipped with the receivers, so customers no longer are required to buy the receivers and have them installed. But are your customers willing to pay nearly $200 per year for their uninterrupted and relevant listening pleasure? When I consider how much I pay for lattes each week, the cost of a monthly subscription is a drop in the bucket. Perhaps my priorities are skewed and needs review! Where do you stand? Email me at Cameron@dealermarketing.com and let me know.

Michael Bowen

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