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Viewing report
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The Satellite Radio Report
eMarketer, Jan 2006, Pages: 14
A Sample of the Content from the 'Satellite Radio' Report:
Advertising:
Both Sirius and XM feature commercial-free music stations, but have some commercials on their talk and news shows. These include on-air reads by radio personalities, which can bring in thousands or even tens of thousands of dollars per read, depending on the popularity of a show. Broadcasting coast to coast, satellite radio offers marketers a national audience for their advertising, an opportunity not available with terrestrial radio.
For the nine months ending September 30, 2005, XM reported $12.8 million in advertising revenue, up from $4.5 million over the same period in 2004. Sirius reported $3.1 million in advertising revenue for the latest nine months, up from $399,000.
Sirius and XM are looking to increase their advertising revenues. According to a recent article by Reuters, Tobin Smith, founder of ChangeWave Research, estimates that 8%–12% of Sirius' revenue and 5% of XM's will come from ad sales in five years. Smith gives the advertising advantage to Sirius because of Stern and Sirius CEO Mel Karmazin, who has vast experience in radio advertising. Both companies also plan to offer subscribers the ability to purchase songs and content they hear on the radio as they listen, offering another income stream.
Deutsche Bank estimates that total advertising revenues for both companies will reach $481.6 million by 2012, up from $9.4 million in 2004. Although XM currently brings in more advertising revenues than Sirius, by the end of the decade, Deutsche Bank predicts that this situation will have reversed.
Advertising revenues will stand at about $28 million by the end of 2005, according to Kagan Research, and will total over $854 million by 2014.
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