Arbitron’s Infinite Dial 2011 Study Tells SIRI Investors What They Need To Know
Some interesting aspects of the 2011 study tell us what is happening in smart phones, how popular Internet streaming is, the impact of social media, and simply the mindset of the various demographics that utilize media in one way or another. Some key points to this years survey include:
- Nearly 90% of U.S. households have access to the Internet and most via broadband connections
- Multi-computer households are growing rapidly
- Two-thirds of homes with Internet access have Wi-Fi network
- More than half of Americans 12+ now have a Facebook® page
- Among 35-54s, Facebook use jumps 25% in one year
- Smartphone ownership has tripled in two years
- Weekly online radio usage crosses the 20% threshold
- Ages of heavy radio users closest to population; heavy Internet users skew younger, heavy TV users lean older
Interestingly nearly 24% of those that responded to the survey specifically state they use Pandora while just 12% state they use satellite radio. Satellite radio remains ahead of the iPhone (9%) in terms of use, but has slipped behind smart phones with Google’s Android operating system which came in at 13%.
The study shows that 34% of respondents representing about 89 million people listened to Internet radio during the past month. Of that group about half listened to AM/FM on line while the other half listened to another Internet radio service. How sticky is Internet Radio? About 57 million have listened in the last week with a self reported time listening at 9.47 hours per week. In terms of Internet radio Pandora seems to be the big winner with 10% of the respondents listening to the service in the past week.
Some people assume that Pandora and all Internet radio companies appeal to the younger generation seeking freebies. The Arbitron study indicates that the biggest demographic goes to those aged 25-34 (23%). The 18-24 category accounts for 16%, while those 35 to 44 account for 10%. In essence 33% of Internet radio’s listenership comes from a demographic many satellite radio investors seem to think would not listen.
As Sirius XM investors and subscribers await satellite Radio 2.0, we often ponder what services the upgrade will offer. Well, Arbitron’s study would seem to indicate what consumers are looking for, and hopefully Sirius XM is ready to offer up some of these features:
- 77% of Pandora users like the ability to customize channels
- 74% like the ability to skip songs
- 62% like that it has fewer commercials than AM/FM
- 49% like that there are no DJ’s
Will Sirius XM offer up some of these capabilities in the future? Only time will tell. One thing is certain, they should be keeping their finger on the pulse of what consumers want.
Another dynamic that is huge in my opinion is the explosive growth that the smart phone segment has seen. In 2009 only 10% of the people had smart phones. It is expected that 31% will have smart phones by the end of this year. The numbers are staggering. With smart phones comes additional capabilities. Consumers can not only access Sirius XM on their phone, but they can listen to a myriad of competitors and even get video.
How important is the smart phone to Sirius XM? The answer is very important. Nearly 60% of those that have a smart phone would give up their television before giving up their smart phone. Smart phone users are never more than a few feet from their device. People actually get stressed out if they leave their phone in the car while they shop! In my opinion Sirius XM can become a dominant force if they sweeten the offerings on the smart phone platform by treating a smart phone sub like an OEM sub.
The Arbitron Infinite Dial presentation is a wealth of information. SIRI investors would be smart to check it out.
Position – Long Sirius XM Radio
[ PDF Arbitron Infinite Dial 2011 Study ]
What did it tell me and how come you are always sounding like you are warning us about some impending doom ?
Satellite radio has a huge internet presence and it just depends how much they want to exploit it before 2.0 comes out. Internet listening to music is more costly and must be a secondary business to their sats for the next few years until they could afford the royalties across a much larger audience.
Pandora will be dead broke in a few years or bankrupt.
It tells you what American consumers like, what demographics are doing what, and the direction media companies should be looking into.
Internet radio for Sirius XM is more costly in what way?
1. There is no need to manufacture chips and/or radio’s
2. There is no installation subsidy
3. There is no revenue share
All of the above cost money.
Sirius XM passes on royalty charges to the consumer, so exactly how does that cost the company money?
There is no pending doom unless satellite radio chooses a direction that does not match consumer demand. What investors should do is look at data like this, which is a blueprint of consumers, and see if the company they are invested in can match those blueprints.
People say the Internet is more important to them than anything else. You want Sirius XM to wait a few years to embrace the platform. My opinion is that the company needs to be where consumers are and not somewhere else waving their arms trying to get consumers to come over.
My point remains…if it is only music you want Sirius is not your thing. The real qustion is how many people choose Sirius for the vast amount of content. NFL, MLB, NHL, NBA, CNBC, FOX, MSNBC, ESPN, Stern and much more….Its not about the music. Why is ESPN so much bigger and better than other channels? Content=Price=content=price increase=content…..
The other aspect to consider is what other companies are likely to do. Slacker just added customizable ESPN, has ABC News, and also comedy. As Internet Radio providers shift into additional non-music content, the competitive landscape blurs even more.
…And they will start charging like sirius xm. There is no other way. You cannot be profitable without charging. Now we are comparing apples and oranges but soon we will start comparing apples and apples. To make real money, you need to charge. Do you think we are smater than Mel and hundreds of media gurus who keep saying that we are alreday in the “on demand” era? Folks will be paying for these services like they pay for HBO, showtime, broadway, theater, etc. There are no other business models. And here siri is head over shoulders above everybody else because they already have HIS MAJESTY CONTENT and they are now, fortunatly for us, OUT OF THE WOODS making tons of money unlike pandoras and slackers who (1) are still in the red, and (2) do not have the money to create or acquire comparable content. Also, we should not forget that siri reigns in the auto undisputably and its challenge is to get a serious foohold in the internet market. At a minimum, they will be competitive. Once the other guys start charging, they may very well start losing listners who will be comparing apples and apples, or, if you like, oranges and oranges. Don’t you see this, Spencer!?
You guys are ignoring a few things.
Even if Pandora or Slacker charged, they do not need the same capital costs as Sirius XM does. There’s a lot that these smaller companies can save. You don’t have to make multi-millions to make a profit.
Listeners don’t care about profit or loss, or how much money the company makes. They care about the experience, and Pandora and Slacker are doing something new.
The thing is guys, this is a prime example of a Disruptive Technology, something that regular radio has trouble competing with. SXM is more like traditional radio than you’d think.
http://en.wikipedia.org/wiki/D.....technology
The reason why this site and other sites have started talking about it is because it is a legitimate concern and right now SXM does not seem to be doing anything right now to compete with it. Perhaps they can’t.
Look at other media industries. The music industry itself got upchucked when Napster came along, and then iTunes provided a legitimate way of grabbing music. Craigslist is successful yet still rather small (in terms of employees), and has disrupted the newspaper’s classified ads.
Smart media competes with these technologies. That’s why you see new innovations in TV like Hulu and PVRs and other ways to get the content.
The big problem right now is that SXM is not really doing anything. Ever since the merger, they’ve been stuck in the doldrums. They haven’t created any significant new consumer devices for radio. They’ve not stuck with the XM successful model of eclectic music content, angering a lot of fans and making Slacker and Pandora a lot more attractive.
Stockholders need to look at all the things out there–they do not need “yes men” who just report positive news and ignore negative news to pump up the stock price, or be afraid to report on the competitive forces.
VI…..
I see many things. I see that even as a huge fan of satellite radio that I have been attracted to other services that appeal to me for various reasons.
I once had a Palm Pilot PDA….I thought the device was wonderful. A year and a half later all of that greatness was in my phone and the palm pilot sat in a drawer collecting dust.
Palm tried to respond with the Palm Pre, but did so too late. The company is now a virtual dinosaur.
Connected dashboards are expected to go from 45 million this year to 210 million over the next 5 years. A connected dashboard allows consumers to have a wealth of choice built right in. The viable companies will all have a place there with an icon on the screen. Pandora, Slacker, and MOG will be right there next to Sirius XM and AM/FM.
In addition, the uniqueness of Sirius non-music content is evaporating. The major sports leagues have their own apps. ESPN is no longer exclusive to SIRI (Slacker offers it).
Can Sirius XM win out. Certainly, but they can not coast along and do it. They need to take active steps to keep their place as king of the mountain.
oborne, why is it you always have to explain yourself after every post. Wake up and smell the coffee, man. They are on to your “clicks for tricks” antics. Take up another hobby you are lacking badly at this one.
sclem…
1. Did you ever learn how to properly address someone, or were your parents lacking in that department….on second thought I retract that….More likely you were just too stupid to learn.
2. I answer people who pose questions and make my own comments. It is my site. I can do what I want.
3. What “clicks for tricks”? Who is “they”? You do not have to visit this site at all, nor does anyone else.
4. What do you find offensive about this piece? A scientific study that gives insight into American consumers and their desires in media is bad how????
Have a wonderful evening