November 2007 auto Sales And SDARS Relationships
Auto sales for November 2007 have been posted, and the results are a mixed bag yet again. Sixteen of the brands saw an increase in sales over last year, while nineteen have seen a decline. Auto sales are important to the satellite radio sector because they represent a large driver for getting consumers to at least experience what satellite radio has to offer. Data from XM indicates that slightly over half of those who experience satellite radio in their car elect to continue the service. While Sirius does not offer take rate data, it appears to be somewhat in line with XM’s experience (though extrapolation is difficult).
The data presented here does not represent satellite radio installations, but rather vehicle sales. The satellite radio partner of each brand is reflected in the data. It should be noted that not all brands are not equal in terms of satellite radio installation penetration. Some auto makers install at a much deeper percentage than others. Also important to note is that not all OEM deals are the same. Among the differences are the length of the initial subscription, the subsidy paid for the installation, monies received for the subscription, and the amount of revenue share paid to each manufacturer. Simply stated, some OEM deals are more profitable than others.
Position – Long Sirius, XM. No Position OEM’s.
“While Sirius does not offer take rate data, it appears to be somewhat in line with XM’s experience (though extrapolation is difficult).”
What is interesting is that Sirius always SAID they would provide data on OEM conversions as soon as enough data were available to be meaningful.
Then, last quarter, they changed their story, saying they weren’t planning to provide it because the nature of the data wouldn’t add any useful information, something like that.
The only sensible explanation for this decision is that the data looks unfavorable next to XM’s. While XM is converting about 52% of its OEM installs, one wonders what SIRI’s actual conversion rate is. Could it be 45%? Even lower?
I know you probably have done the arithmetic to come up with a range of possible conversion rates. Maybe you could present your arithmetic to your readers?
You can come up with your own methodology for trying to determine the teake rate.
Making an assumption that it must look bad when compared to XM is taking a leap. For whatever reason you are developing a take rate of 45% or lower. By what basis do you come to this conclusion?
Reasonably speaking, the take rate for SDARS would be pretty consistant.
You can look at the gross additions number, back out the churn, and come to some reasonable conclusion. Would it be nice if Sirius gave the data? Sure. Does it really change the outlook? No.
I actually didn’t say 45% or lower — my point was that none of us knows what the take rate for Sirius is because they have refused to disclose it.
One can draw his own conclusions — but given that a year ago they were saying, “Yes, we’ll disclose it when we have enough data available” and now they’re saying, “No, we’re not going to disclose that” — it suggests there is some reason they are trying to hide the figure.
In the past, Sirius has tended to hide disclosures when the items in question are worse than XM’s (for example, SIRI doesn’t disclose CPGA). So, one can easily infer that SIRI’s take rate may be worse than XM’s.
You claimed the conversion rate would be reasonably consistent, but there is absolutely NO REASON, WHATSOEVER, to believe this. It may well be that people are happier with the XM service and therefore, tend to convert more frequently.
In fact, there is other evidence that is strikingly similar. While Sirius listeners overwhelmingly support the merger, XM listeners are mostly against it. This is strongly suggestive that Sirius listeners want a way to get access to XM’s content, while XM listeners would prefer to keep the content they have.
Can you draw parallels between the two unrelated bits of information? I don’t know. But it is apparent that Sirius listeners expect that a merger will improve their experience in some way, while XM listeners seem pleased with what they have (and in fact, commonly express on message boards that they’re concerned the merger will result in a decline in programming quality).
A few things to note:
1. CPGA is a metric that can be largely impacted by the structure of a deal. For example, revenue share is not included in CPGA. Thus, you could structure a deal with low front end costs, a high revenue share, a small payback and report a wonderful CPGA. OR you could strike a deal with a higher front end cost lower revenue share and a healthy payback from the OEM. The CPGA would look bad, but which deal is better. The CPGA metric goes much much deeper than simply the reported number.
2. I would assume that people are happy with the XM service. I would also assume that people are happy with the Sirius service. Fully loaded churn and self paying churn will give you an indication of consumer sentiment. XM’s self paying churn is 1.8% or so. Sirius’ is 1.6% or so. You can infer what you want from there. You can obtain the self paying churn by listening to the most recent conference calls. Transcripts are available on Seeking Alpha.
3. XM listeners are mostly against the merger? Where pray tell do you come up with this? I have read each and every comment filed with the FCC. Over 11,000 of them. XMK listeners are just as supportive of the merger as Sirius listeners. I would love to see where you come to the conclusion. Sirius listeners want XM content. Sure. XM listeners also want Sirius’s’ content. It goes both ways.
4. There is indeed a small group of XM and Sirius listeners that do not want the merger. They can be a vocal bunch, but I doubt you could list a meaningful number of them.
>>> I have read each and every comment filed with the FCC. Over 11,000 of them. XMK listeners are just as supportive of the merger as Sirius listeners.
I noticed you didn’t break this down in your “analysis”.
With all due respect, there is no need to break it down. The comments are public record, and available for you to read.
You made the statement – “XM listeners are mostly against it”
Evidence of your assertion does not exist.
Do you need analysis to point out the obvious? I suggest you read docket 07-57. It is quite obvious that there are more pro merger comments from XM listeners than anti-merger comments.
>> Evidence of your assertion does not exist.
No, only in the form of anecdotal information — no scientific surveys (and, of course, even a survey of the FCC posts would be only anecdotal, as well).
Of those who responded at orbitcast, 20/27 who preferred XM opposed the merger, while 1/15 who preferred Sirius opposed the merger.
Of those who responded at xm411, 54/65 who preferred XM opposed the merger. 1/4 who preferred Sirius opposed the merger.
Not scientific, but at least indicative, and it is “evidence” — although one could argue that it isn’t scientific, I think it would clearly be statistically significant amongst the populations on these two boards.
You, OTOH, are arguing that there is no difference between XM and SIRI listeners, and you have NOT ONE THING to support your view. That’s why I asked whether you had any numbers to back it up.
Our sister site http://www.satcos.blogspot.com offers several surveys with more respondents that counter what you have provided.
In addition, I reviewed comments 1001 through 1100 in the FCC comment section after less that 20 comments, 3 or 4 clearly identifiable XM fans were for the merger and one against. About 5 clearly identifiable Sirius fans were for the merger, and none against.
The FCC has over 11,000 comments and they are all available for public review. Please take a few minutes to look at these.
I am well aware that you do not like this site, and oft speak ill of it. That is fine. That is likely why you choose to post here in an anonymous fashion. There are several “closet readers” that come here. If your tact is to get me to waste hours researching something that is patently useless, you will not succeed. The time already wasted is enough. The FCC record speaks for itself. I doubt you will review the FCC record, as it will point glaringly that your assertions are simply wrong.
Most who comment do not even offer up which service they subscribe to. That should be telling in and of itself.
Cheers.
I don’t speak ill of it. I just think people ought to take it with a pro-Sirius grain of salt.
Hey, I come here and read what you say almost every day.
To be fair, you do a lot of digging and present information that would be a PITA to find on my own, so I appreciate it.
I just know that it is necessary to take it with a grain of salt. I do appreciate that you have finally come around on the Nissan #s — however, to give SIRI 25% is a pretty big overstatement considering that almost every car on Nissan dealer lots is either XM equipped or without sat radio. There probably aren’t 100 SIRI-equipped Nissans on dealer lots in America today, and a very large number are XM equipped. But at least you finally acknowledged that Nissan is an XM exclusive (well, you sort of acknowledged it — I assume over the next couple months you’ll have to fully acknowledge it, unless you plan to leave SIRI at 25% for the next couple of years).
Now, if you can just come around about Toyota!
It is great being vindicated on everything I said about Nissan and Toyota. Do you think you and Rich could get together and make a joint public statement that your posts all over all these message boards were wrong and that Nissan and Toyota are XM exclusives and old stupid Frontmed wasn’t as stupid as you thought?
I didn’t think so 😉
Nissan’s 2008 vehicles are going XM. I have written about this several times. I carry 25% because Nissan is still selling 2007 vehicles.
Toyota is not exclusive to XM. You can refer to their filings with the FCC to see this yourself, or even the toyota corporate website, which lists both Sirius and XM as options on their cars. Here is a sample Camry:
http://www.toyota.com/camry/ac.....ories.html
Toyota seems to be quite clear about this. Whether you choose to accept or ignore it is up to you. For most people, Toyota’s own corporate website tells the story.
>>> Toyota is not exclusive to XM.
You cannot, no matter what you do, get a factory installed Sirius in a Toyota. You can, however, get factory installed XM on many Toyota models.
Toyota, by all appearances, is about where Nissan was a year or so ago. The Toyota ship has sailed, and the deal with XM is exclusive. You cannot now, and will not in the future, be able to get factory Sirius in a Toyota.
At one point, you argued that the Nissan/SIRI dealer install deal was as good as a factory install deal. Today, you can see this clearly isn’t the case. As XM is rolled out in other Toyotas as factory installs, Sirius will have no shot at Toyota.
Of course, if the merger happens, that could change years down the road.
Regarding XM fans and the merger. Look at the most recent 10 comments on the FCC web site. Of the 10 comments, 9 support the merger. Of the 9 that support, 3 are clearly identified fans of XM.
http://fjallfoss.fcc.gov/prod/.....6519817620
http://fjallfoss.fcc.gov/prod/.....6519817608
http://fjallfoss.fcc.gov/prod/.....6519817561
Regarding Toyota. I have never claimed that the deal was a factory installation deal. I have stated that out of all manufacturers, toyota does the most work at the ports. Tires, radios, seats, air conditioning, etc. are all common port installed items. No, you do not get a factory installed Sirius radio from Toyota, however, the dealers can and do place orders for their cars, and they commonly equip the cars to a consumers liking.
Look at the Camry inventory at this dealership. Neither XM nor Sirius is prominent in the 21 Camry’s on the lot, but consumers can choose either. As it should be. Letting a consumer have a choice is a GOOD THING.
http://www.toyotaofdartmouth.c.....entory_new
To be fair, the dealer at your link has no top-of-the-line vehicles. Apparently, it is a small dealer that doesn’t stock the fully configured models. If you look at dealers that don’t order satellite radio, then obviously, you won’t see a difference.
Here’s one I used to use when I lived in Dallas. Notice that ALL of the top-of-the-line Camrys have XM; none have Sirius.
http://www.toyotaofdallas.com/
Now, given that we know that 52% of those will become XM subscribers, is it not a fair and reasonable conclusion that Toyota is not a 50/50 split, and that the vast majority of Toyota sat radios will be XM, not SIRI?
I’m not saying there will be a lot of either. But it really is a misstatement to claim that Toyota is “both” when almost all Toyota satellite radio sales are obviously XM. This is the kind of thing I’m referring to when I mentioned your pro-Sirius bias.
Believe it or not, there are markets where XM ouperforms Sirius, and where Sirius outperforms XM. Texas is an XM stronghold…so to speak, but the inventory can and does vary.
Take this Boston deler
http://www.herbchamberslexusto.....e=n_search
several are equipped for satellite radio but they leave the choice to the consumer
“JBL AM/FM stereo w/6-disc in-dash CD changer-inc: satellite radio capability, MP3/WMA playback, auxiliary audio jack, Bluetooth, (8) speakers”
The Toyota website still offers consumers both products. Simply get the JBLK system, and you can make your satellite radio choice. A good thing by the way.
http://www.toyota.com/vehicles.....odels.html
Is the split 50/50? 60/40? 70/30? No one really knows for sure. Neither Sirius nor XM have stated anything with regards to this. The data in this article outlines the deals that are in place and the relationships.
If each and every Toyota dealer ordered XM equipped vehicles then XM that would become very apparent on dealer lots. In my area, there are fewer satellite radio equipped toyotas than I would care to admit (be it Sirius or XM). However, I have been to dealerships and seen both Sirius and XM on the lot.
Regardless, a merger changes the entire landscape anyway.
Further, I have never been shy about saying that the exclusive deals are foolish. I have no problem at all letting the consumer make a choice, and in fact would prefer it that way. I want Joe to get the service he wants, sally to get what she wants, and you to get what you want. When a car company forces me into something I do not want, I shop elsewhere.
Driving 50k to 60k miles per annum, I am not about to let Ford, Honda GM, or any manufacturer dictate my listening.
>> Regardless, a merger changes the entire landscape anyway.
Not really. Assuming merger approval tomorrow, it would be years before you could get Sirius in a GM car, or a Honda, Nissan, or Toyota factory install — and same thing about getting XM in DCX or Ford.
In fact, there is no guarantee it would ever happen. I fully expect that after the merger they will decide against any dual capable receiver and in favor of just eliminating the Sirius receivers altogether in favor of XM. I could be wrong, but I believe this scenario makes more sense than any other I can think of.
There is not a sufficient market for dual-mode receivers to warrant the expense of building them — either for OEMs or for retail sale.
These days, most antennas on cars are already capable of receiving both Sirius and XM. The “conversion” is as simple as switching out a box, either at the port, dealer, or by the consumer.
What will transpire post merger is yet to be seen. As long as they keep the bandwidth, they will have options.
>> These days, most antennas on cars are already capable of receiving both Sirius and XM. The “conversion” is as simple as switching out a box, either at the port, dealer, or by the consumer.
This may be true in some instances, and not in others. For example, Nissans, Infinits, Toyotas, Lexus, and others that are equipped with Navtraffic — you cannot just slap a Sirius box in and have Sirius. In fact, I believe it is correct that Sirius isn’t even an option on such vehicles. I know it isn’t for Nissan, and I believe that is correct for Toyota as well.