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What the new Bridge Ratings HD Radio study really means

The folks at Bridge Ratings have put out some growth projections for Satellite, HD Radio, and other media between now and 2020.

I’ll set aside the issue of how it’s possible to project growth for a product like HD Radio at this stage of the game, since the essence of growth projection requires a measure of units in hand and a measure of early sales growth, and I doubt these statistics are very stable at this point. Further, what assumptions are being made about the supply side: Are Best Buy and the automakers and Wal*Mart in or out of these projections? None of that is clear. All of it makes a big difference.

That said, sales and growth estimates for the other products profiled by Bridge are very well established suggesting their estimates have much more a ring of truth about them.

Here’s what they show (I have rounded off the decimal for simplicity):

Let’s assume this will be accurate.

First, Bridge’s projection of 9 million for HD Radio by 2010 is about 1 million LESS than what Forrester Research projected a year ago (when estimates were even harder to make).

I’m not even going to consider 2015 or 2020 because anybody today who thinks they’re making decisions on that timeline has never met a Wall Street banker.

Second, note the environment that HD Radio will be living in in 2010. Compared to the projected penetration of HD Radio, Bridge Ratings predicts we’ll see:

133% MORE consumers streaming audio on their mobile phone (a technology newer than HD, by the way) – 200% MORE subscribers to Sirius and another 200% MORE to XM, for a total of 400% more Satellite subscribers than HD users – 2000% MORE broadband Internet users, many of whom will devote at least some of their audio entertainment time to radio via broadband – and not necessarily from the local stations (many of which are still debating the efficacy of streaming)

Sure, it could be argued that the Satellite Radio projections are too generous (they seem that way to us), and that the HD projections are too low (and it’s certainly not possible to know). Still, the proportions lean heavily – regardless of whether or not they’re off by a million or two.

What this means, as I’ve said before, is that we as an industry should focus on the most popular channels of distribution and our unique and compelling advantage in creating content suited to those channels.

And by the way, the most popular of all audio channels of distribution is right now in your work, your car, and at home.

It’s called a radio.

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