Used Car Anecdote

[Newman]

Longview eh? Im from about 9 hours south of you... =)

Let me hit your questions as you asked them:
As far as the car manufacturers, each one (Called an OEM - Original Equipment Manufacturer) has a different agreement within the two companies, and these agreements for the most part are not public information. Basically it goes like this: Sirius subsidizes (pays for) the radio, and gives it to the OEM. The OEM then sells the car. Depending on the length of the "trial offer" built in to the price, the OEM then pays Sirius for those months. If the customer becomes a subscriber, then Sirius pays the OEM a percentage of the revenue off of that radio.

Also on the used car side, say for instance i buy a FORD Focus which has a SIRI installed stereo and turn around and sell it 6 month's later how doe's that work.

It depends on the "trial" that is built into the price of the car. If it is a one year trial, then who ever you sell it to will enjoy another 6 months. If it is a 6 month trial, then it will deactivate. If it was a 3 month trial, then it deactivated 3 months before you sold it.
If you actually paid for a subscription, then it is different. You can call Sirius, let them know that you sold your car, and that you want that radio deactivated. They will ask you for a radio ID that you want to switch the subscription to. Give them the new radio ID, and they switch over the subscription.

You say there are 20 million radios out there that are not activated, where exactly are those radios sitting at? Are those the radio's in the new car's awaiting new membership after the inital free 3month, 6 month, 1 year awaiting for renewal into a full membership?

No. Those 20 million radios are radios that have been sold that are no longer activated. Either someone bought a car with it and then never paid for the subscription, or a retail radio that never got activated, or got canceled. A large majority of those 20 million radios are in cars. If those cars get sold, then obviously there is a potential to pick up another subscriber from the new owner. Of course, a small number of those radios are ones that are now broken, trashed, or in cars that have been junked due to wrecks, or what ever, but that would be an insignificant amount in my opinion.

[deewcom]

20 million radios could be activated in the blink of an eye with that free band of ad-supported channels that many have suggested. 20 million listeners who could be enticed to purchase subs. It would be like shooting fish in a barrel. I hope SIRI will do this - especially if discounted subscriptions are made available at various price points. This aspect is currently under development, but it is not available for existing radios. New "ala carte" radios are being developed and they are to be available for this Holiday season. People will be able to buy an ala carte programming package for under $7.00 per month.

I asked my car salesman friend about Satellite Radios in used cars because it provides a measurement. Was he seeing SATRADS in the used cars and trucks he sells? Unfortunately, his answer was NO. He has not seen any! I wanted to know how a used-car salesman handles the SIRI/XM radio situation with a customer. The point was moot.

While that sucks, it also shows that the used car market will change in favor of SIRI/XM over the next few years. As SIRI/XM has now saturated the OEM market, when these cars reach the used-car market they will help SIRI/XM to further penetrate the nation.

[zcurzan]

EDIT: Oops didn't see Newman's response on page 2 of the thread. But so that all that typing wasn't for naught, I'll leave it up. FYI we touch on the same points so feel free to skip.

Vehicle Installs
Actually WE have been paying the car companies to install our radios. We have been subsidizing the cost of the radio, and in some cases agreeing to revenue shares just to get the physical radio receiver into car dashboards. (This is the huge cost of adding an incremental subscriber to the service. The lower we can drive the cost of acquisition, the more profit from a subscriber will simply "fall to the bottom line".) What the car companies have been doing on their end, in an effort to make their cars more appealing to a buyer, is purchasing a temporary (6-9 months?) subscription for that radio. Contrary to what some people believe. This is not a "ghost sub". It is bought and paid for my the car company themselves. No different than an actual consumer paying for 6 months. The only caveat is that I think between XM And Sirius the combined company has about a 50 percent churn rate, meaning 50 out of 100 elect to not continue the service after the intial trial.

Used Car Sales
If the car was still under its trial radio period, and you had never opted to purchase a subscription. The used car would transfer title to some other driver, and if there was any "free radio" left, they would continue to receive that service until it expired. Had you activated the radio yourself, I'm pretty sure you can deactivate the radio and "carry" your subscription to your new car's radio. (Unless of course you feel like paying for someone else's radio every month) If you elected for a lifetime subscription instead of a fixed time period, I believe you can only move that subscription from radio to radio two times before it becomes permanent.

Not only are private used car sales going to expose new subscribers. But many certified pre-owned programs are beginning to offer satellte radio trials in their used car sales, the same way you would receive one if you had bought new. I know for a fact GM does this, I'm not too familiar with the others. So even if you never buy new cars, and you don't happen to pick up a satellite equipped radio via the classifieds, if you buy certified preowned from a dealer, you will not only have the radio in their car, but will be exposed to it for 6-9 months in the hopes that you will like it, and buy it after.

Not Activated
Yes, the not activated radios are generally ones that were installed in a car for a free trial, and the subscription never took. The hope is you can get them back into the service now that the price has been lowered, the content is in the process of being consolidated, or that the car (and radio) is passed along to someone who was previously unexposed to the service.