Today's 60s/70s Oldies Format - Question

[DavidEduardo]

The biggest reason people have gone to satellite is the fact that they got a year of service free with a new car. Most of these churn after the first year, when confronted with a bill for $150 for the next year. That is why the ocmpanies are losing so much money.

I hope that you're not suggesting that these people don't keep satellite because they can't afford it. That would mean that commercial radio's audience is made up of listeners who can't afford satellite. And if I were an advertiser, I'd be concerned about that. I'd be thinking "if commercial radio listeners can't afford satellite radio, then maybe they can't afford MY product".

The median household income in the US is around $50,000. Around or below that number, most income goes to housing, transportation, education, cloting, food, utilities, etc. Things like satellite are "discretionary" items. Many people would rather spend the $13 a month for and extra cable tier, for example. Or for better pet food. Or a movie once in a while.

Since most satellite installs are in car, it depends a lot on the value of satellite in the car vs. other things that the same money could buy. While $13 a month may not seem like much, it is the kind of ongoing expense that many will consider less attractive than other uses of money. It's not that folks don't have it; it's the perception of value.

 

[AZJoe]

Most do not "churn" after the first year. The churn rate is between 2.0 and 2.3 % depending on which sat service they have. If the churn rate was "most" (over 50%), then both services wouldnt have over 18 million subscribers. The growth rate is not just new cars with year old subscribers dropping out, sorry that just isnt factual. In fact, information shows that the vast majority of subscribers who have had Sirius or XM over one year are keeping it.

 

[DavidEduardo]

Most do not "churn" after the first year. The churn rate is between 2.0 and 2.3 % depending on which sat service they have. If the churn rate was "most" (over 50%), then both services wouldnt have over 18 million subscribers. The growth rate is not just new cars with year old subscribers dropping out, sorry that just isnt factual. In fact, information shows that the vast majority of subscribers who have had Sirius or XM over one year are keeping it.

I think if you track the curn rate issue in the SEC filings, you will find that the rate you cite is quarterly, not annually. Of course, in an investor call, it is nicer to say a monthly rate than to have to multiply the percentage by 4. I can't remember where I read it, but there is a significant percent of new car installs that do not activate, or, if activated free, do not subscribe after the free part expires and the percentage is around half of all cars with factory installs...

 

[Oldbones]

I hope that you're not suggesting that these people don't keep satellite because they can't afford it. That would mean that commercial radio's audience is made up of listeners who can't afford satellite. And if I were an advertiser, I'd be concerned about that. I'd be thinking "if commercial radio listeners can't afford satellite radio, then maybe they can't afford MY product".

To many people "I can't afford it" is another way of saying "it's not worth the money". I know you're always beating the drum for satellite, but not everyone shares your enthusiasm.

 

[AZJoe]

The problem is that too many people who oppose sat radio, have never tried it, and the majority that have are keeping it. Sat radio doesnt have to get 100% of the radio audience, just as HBO or Showtime do not get 100% of TV viewers to subscribe. Sat radio is for people who want something different than terrestrial offers, better programming, niche formats, deeper playlists and commercial free music offerings and coast to coast coverage. The majority of radio listeners dont care enough about radio to pay for those offerings, good for them. XM & Sirius dont have to have 300 millions subs, but to ignore 18,000,000 subscribers and say they dont count or are insignificant is being ignorant. Two and half years ago Sirius had 600,000 subscribers now they have nearly 9 million, thats growth, however you want to try and play it down. DISH Network and Directv reach 30 million plus tv susbcribers, say thats only 10% of the population, are they failures? Terrestrial radio keeps saying sat radio is a dud, insignificant & it isnt anything but a fly in their soup, so to speak, so why are they trying so hard to kill it and spend so much time worrying about it?

 

[TheFonz]

The problem is that too many people who oppose sat radio, have never tried it, and the majority that have are keeping it.

Great point. Like I said in an earlier post, every 60 year old with a satellite radio exposes that radio to people in younger demos. That's why commercial radio needs to find a way to service those 60 year olds.

 

[amfmsw]

Fonz...I disagree..quirkily.

Radio doesn't need to find a way to serve 60 year olds...it needs to stop abandoning them!

 

[DavidEduardo]

Fonz...I disagree..quirkily.

Radio doesn't need to find a way to serve 60 year olds...it needs to stop abandoning them!

We've been over this time and again; radio can not program for age groups advertisers have no interest in. There is, simply, no way to pay the bills.

 

[KFodor]

David:

You beat me to the punch.

These guys are simply ignorant of reality. Advertisers use other means to reach 55 plus. They have virtually zero interest in advertising on a station whose listener-base is over age 55.

A station I programmed was #1 25-54, & #1 35-64. The audience was heavily 45 plus. We lost 50 cents on a dollar!!!! A good "drive time" hour was 7 minutes of commercials. You can't survive like this.
And I don't blame the ownership for changing format eventually. When you can't make money being #1, you need to change.

As I've said (and as David has said) over...and over...and over...Radio isn't the problem.

 

[KFodor]

The problem is that too many people who oppose sat radio, have never tried it, and the majority that have are keeping it. Sat radio doesnt have to get 100% of the radio audience, just as HBO or Showtime do not get 100% of TV viewers to subscribe. Sat radio is for people who want something different than terrestrial offers, better programming, niche formats, deeper playlists and commercial free music offerings and coast to coast coverage. The majority of radio listeners dont care enough about radio to pay for those offerings, good for them. XM & Sirius dont have to have 300 millions subs, but to ignore 18,000,000 subscribers and say they dont count or are insignificant is being ignorant. Two and half years ago Sirius had 600,000 subscribers now they have nearly 9 million, thats growth, however you want to try and play it down. DISH Network and Directv reach 30 million plus tv susbcribers, say thats only 10% of the population, are they failures? Terrestrial radio keeps saying sat radio is a dud, insignificant & it isnt anything but a fly in their soup, so to speak, so why are they trying so hard to kill it and spend so much time worrying about it?

Yes...but satellite radio needs to get more than 0.000001 percent of the audience. Combine both services audiences, and you would have a radio station that's #25 in New York.

We don't have to try to kill it...it's doing fine all by itself.

 

[AZJoe]

And what terrestrial radio corp do you work for?
Sat radio has about 18 million subscibers in the USA, and 900,000 in Canada. Informed sources say sat radio has 2.5 listeners per subscription , thus about 47 million listeners. You're going to tell me that is 0.000001 percent of the total audience? Where did you go to school? #25 in NYC? If you just took XM or Sirius alone with their individual numbers you'd be #1. Take NYC, LA and Chicago markets and combine them and you don't come up with 47 million listeners. Take your hatred somewhere else. Why are you wasting your time on something you claim is not a challenge to wonderful AM and FM? Sat radio's audience has gone up for 6 years now, and what about terrestrial's audience? LOL

 

[TheFonz]

A station I programmed was #1 25-54, & #1 35-64. The audience was heavily 45 plus. We lost 50 cents on a dollar!!!! A good "drive time" hour was 7 minutes of commercials. You can't survive like this.
And I don't blame the ownership for changing format eventually. When you can't make money being #1, you need to change.

O.K. Let's look at a market that now has 25 AM/FM stations. Ten years from now, in your opinion, how many of those stations will "survive"? And tell us what the formats will be for those that do survive.

 

[DavidEduardo]

And what terrestrial radio corp do you work for?
Sat radio has about 18 million subscibers in the USA, and 900,000 in Canada. Informed sources say sat radio has 2.5 listeners per subscription , thus about 47 million listeners. You're going to tell me that is 0.000001 percent of the total audience? Where did you go to school? #25 in NYC? If you just took XM or Sirius alone with their individual numbers you'd be #1. Take NYC, LA and Chicago markets and combine them and you don't come up with 47 million listeners. Take your hatred somewhere else. Why are you wasting your time on something you claim is not a challenge to wonderful AM and FM? Sat radio's audience has gone up for 6 years now, and what about terrestrial's audience? LOL

Actually, satellite seldom has more than one listener per receiver, as most are in cars and most car listening is commuting and most commuting is solitary. Whew!

A third or less of listening is in the car, where most satellite installs are. So, if 16 million subscribers listen mostly in the car, they amount to the total listening of about 5 million persons (30% of the listening time of the 16 million). Since on a 6 AM to Midnight basis, the average level of radio listening is about 18%, just by pure math, at any given time there are about a million persons listening, on average. That is pretty close to the numbers the satellite Abribron study showed. The Arbitron study showed roughly 1.1 million AQH listeners, and about 700,000 in 25-54. So, either Arbititron or deduction, of 238,000,000 persons 12+ in the US, at any given time, one of every 200 is listening to satellite.

For example, the most listened to XM channel in 25-54, Top Tracks (proving a short playlist is actually what people want) hass around 13,000 AQH persons, or about what the #1 station in Traverse City, MI, has.

 

[amfmsw]

AZ..that's the same disengenuois 2.5 readers the newspaper industry claim for each paper. What satellite corp do you work for? puleeuz.

Everyone knows my sharp critizens of some of Dave's positions. He's on the money here. Using your methods of defense, WBEB Philadelphia hhas an "actual" cume of near 5 million per week. That's an 80 share. It's nonsense. Don't let them suck you in. The only radio companies in more dire straits than CC is Sirius and XM.

 

[AZJoe]

AZ..that's the same disengenuois 2.5 readers the newspaper industry claim for each paper. What satellite corp do you work for? puleeuz.

Everyone knows my sharp critizens of some of Dave's positions. He's on the money here. Using your methods of defense, WBEB Philadelphia hhas an "actual" cume of near 5 million per week. That's an 80 share. It's nonsense. Don't let them suck you in. The only radio companies in more dire straits than CC is Sirius and XM.

I don't work for XM or Sirius, never have. I see by your name who you do or have. Don't get sucked in by the rosey picture terrestrial paints for itself. Ask the millions of people who have sat radio if they like it or not compared to who you work for. China has a billion people more than the USA, does that make them a better country? Kia outsells BMW, are they the better car? Its not always about numbers, its a thing called quality. Enjoy terrestrial, I'll do what I've been doing for 6.5 years (they said it wouldn't last 1 year). Have a nice day!!

 

[amfmsw]

AZ...slow down. My poinient humor was missed.

I have a copy of the Fall Arbitrons that take XM and Sirius listenership as a serious count. KYW-AM or WBEB Philadelphia (Market #6) have more listeners EACH than Howard Stern has in total NATIONWIDE. Really, the numbers don't lie. Satellite listening is not as strong as some were led to think. In my market, PBS/Non Coms beats all satellite listening (what, nearly 200 channels?) COMBINED.

Now, I'll agree with you 100% that terestrial broadcasting has changed, and not for the better (in most cases). Deregulation and new technology has cut thousands of jobs, especially entry level. Even the old Drake-Chenault and Bonneville formats needed a third-class ticket operator to change reels, keep logs and take readings. Now many operators run their stations like a jukebox/ipod. The lights are on but nobodys home. Much FM is copycat and AM spectum is slowly becoming a graveyard. HD will not succeed or help it, only splinter it more. And to older broadcasters, it's heartbreaking. On that, we agree. But it has the ONE thing satellite can never do...localism.

Will satellite ever overtake terrestrial? Possibly, but in my opinion, only when it's free and commercial supported.