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COMPETITIVE MEDIA

Digital Audio / Satellite Radio



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Disadvantages

Digital Audio

Awareness Outpaces Use

  • Awareness of streaming services is high among the American public (96%)
    • 86% are aware of Pandora
    • iHeartRadio has 71% recognition
    • 62% are aware of Spotify
    • Deezer and AccuRadio, the least-known services, have 6% and 7% awareness levels, respectively
  • Only 48% of the 12+ population use Pandora to to keep up-to-date with musc

(Source: The Infinite Dial 2017 - Edison Research/Triton Digital - % of P12+ saying it it very important or somethat important to keep up-to-date with musicaware of audio brand;
Nielsen Audio RADAR 124, March 2015)


Reliability: Consumers won’t tolerate poorly designed interfaces or unreliable features and will switch quickly to alternative services

Lack on In-Vehicle Penetration: The majority of vehicles still don’t have stereo systems that will accommodate a Smartphone or blue-tooth connection, limiting access to streaming services on the road

Cost: Access to services (or expanded functionality) may require payment of subscription fees

Resolution of ongoing legal issues regarding royalties for music aired on digital audio and satellite radio channels may lead those incur additional costs for their programming and ultimately result in passing those costs along to subscribers, or limiting music selections available

Increased Competition in Sector:  Pandora has been the early leader among digital services, but has experienced some erosion as competition with other services has heated up

  • iHeartRadio, Spotify and Apple Music combined are used by approximately 37% of U.S. consumers

(Source: The Infinite Dial 2017 - Edison Research/Triton Digital)

Relatively Low Rate of Adaptation:  Consumers are not migrating en masse to digital. Consumers continue to tune into AM/FM radio as radio continues to deliver content across devises and platforms as well as on-demand


Content Limitations: News and Sports content isn’t widely available at this time, although music consumers also want access to information.

Privacy Issues: Perceived advantage through ability to track consumers may also prove to be a liability as government, consumer concerns regarding privacy increase.

Accountability: Online radio and music services do not have accredited audience measurement services in place.

Online audio channels/services compare the total audiences they claim against single AM/FM radio stations in any given market, making the claim that they are #1 in the market; rightly would need to aggregate all stations for broadcast groups within that market for a more accurate comparison.

Additionally, there is no way to determine duplication among “registered users,” as many may have created multiple account to avoid reaching caps on free listening.


Satellite Radio Disadvantages

Low In-Car Use:  Satellite radio touts its in-vehicle presence, but enjoys relatively low in-car use among consumers

  • SiriusXM claims 76% penetration of total new vehicle population
    • SiriusXM has only a mid-30% penetration of the used car market
  • Availability doesn’t translate to use
    • 22% of Adults 18+ who have driven or ridden in a car in the past month have ever used satellite radio in their primary vehicle
    • 13% of 18+ drivers/riders say the listen to satellite radio “almost all the time” or “most of the time” in car

(Source: SiriusXM Investor Data; The Infinite Dial 2017 – Edison Research/Triton Digital)


Digital Music/Online Radio challenging satellite radio’s in-car use:

  • AM/FM radio is nearly ubiquitous in vehicles of all ages – new or on the road for 10 years or more – and is available at no cost to the listener
  • Digital audio services such as Pandora, Spotify, etc. are challenging satellite radio’s position as the in-car option to AM/FM radio. 
    • SiriusXM has dipped a toe into the streaming audio waters as it has recently invested in Pandora.
    • Apple’s CarPlay presents a challenge to satellite radio as it allows iPhone connectivity to the vehicle’s dashboard for easier access to apps, music, phone calls, etc.

    Monetary Investment: Hardware and/or subscription fees required to receive satellite radio contrast to free over-the-air radio

    Resolution of ongoing legal issues regarding royalties for music aired on digital audio and satellite radio channels may lead those incur additional costs for their programming and ultimately result in passing those costs along to subscribers, or limiting music selections available