What the Satellite Radio Christmas Season means for you

From Radio Business Report:

Bank of America analyst Jonathan Jacoby reports that retail sales of satellite radio receivers were down 46% year-over-year in December, based on data from NPD Group, which tracks all sorts of retail sales. Sirius fared a bit better than XM, but it was a dismal Christmas sales season for both. Retail sales for Sirius were down 40% year-over-year, while XM sales plunged 55%. Thus, Sirius again grabbed market share from XM, claiming 66% of retail receiver sales. “We expect that XMSR and SIRI will have to attempt a merger during the next 4-8 weeks if there is to be a reasonable chance of clearing regulatory hurdles before the ’08 elections,” Jacoby told investors.

A merger is not a business strategy in a time of apparently declining demand, is it? It’s a retreat strategy.

The fundamental problem of satellite isn’t that there are two companies in the field. It’s that they need an easier way to get the content folks want to the folks who want it. Putting all that content under one roof will not solve the problem – it will only clarify it.

Until satellite radio wraps their communal heads around this issue, the troubles will remain.

In the midst of all this we should also understand that as goes satellite so goes HD. Buying a new radio which you aren’t convinced you need is a central issue which plagues both new flavors of radio.

Look for the vibe on satellite and HD to move in lockstep, with HD permanently in satellite’s shadow.

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  • George

    As long as there is nothing new in radio, the story will be spun by the print press that radio is dying. If it ain’t growing or expanding, it must be dying.
    Just doing great radio isn’t enough to please the critics. They will continue to beat the “radio is dead” drum as long as they can

  • http://www.maximumfun.org Jesse Thorn

    With the crucial difference being that the sattelite folks have a five year head start on getting their radios into new cars.

  • http://www.orbitcast.com/archives/sirius-xm-merger-a-concerning-sense-of-urgency.html Orbitcast

    Sirius, XM Merger: A concerning sense of urgency

    Two days ago FCC Chairman Kevin Martin only stated the obvious – that the current rules prohibit a merger. As a result, both stock took a nose dive. Then yesterday, Martin again only stated the obvious – that the rules can always be change. As a result…

  • Dave O.

    “A merger is not a business strategy in a time of apparently declining demand, is it? It’s a retreat strategy.”
    You quoted retail sales which is but one channel. Overall, demand is still increasing, is it not?

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