The mood is understandably mixed at SiriusXM Radio. Third Quarter revenues are up 14% with 446,000 new subscribers pushing their paid subscriber base to a record high of 23.4 million. But the pending February 1st departure of CEO Mel Karmazin has many industry insiders and SiriusXM staff pondering the prospects of their future under John Malone’s Liberty Media.
Wall Street is bullish. Share prices of SiriusXM stock (SIRI) have risen nearly 60% this year and many analysts have upgraded their ratings and estimates for the satellite radio company’s performance.
The company’s deals with auto makers remain rock solid, accounting for many of SiriusXM’s new subscribers. Three-month “new car” trial subscriptions convert to paid subscribers after a 90-day taste of 135 channels of commercial-free music, pro sports, live news, talk, comedy, entertainment, traffic and weather. In a new twist, Volkswagen recently began offering a four-year complimentary subscription to SiriusXM Traffic channels with every new car purchase. SiriusXM has also begun leveraging used car dealer networks to convert previously installed satellite chips into opportunities to convert used car buyers into new SiriusXM subscribers.
Roughly half of SiriusXM channels sell advertising time to clients and advertising agencies. These are primarily “spoken word” programming channels, running the gamut from News (CNN and CNBC cable TV simulcasts) and Talk (conservative and liberal programming, truckers, GLBT) to Sports (ESPN, Fantasy Sports Radio) and Comedy (Raw Dog Radio, The Foxxhole).
Direct response radio advertising promoting websites and phone numbers dominates the advertising landscape, with a lower-than-average index of traditional “branding” advertisers.
And while SiriusXM does promote its total number of subscribers and provides some guidance to who’s listening to what, the satellite service steadfastly refuses to release audience information for individual channels. Advertisers have no idea if 100 or 100,000 people are hearing a specific message on any given channel, perhaps accounting for the high mix of direct response advertisers who live-and-die by measuring and managing results, rather than counting gross advertising impressions.
The Radio Agency is one of many year-round buyers of SiriusXM Satellite Radio that would like to see this reporting practice modified under new ownership. It’s difficult for a first-time advertiser to invest five- and six-figure advertising budgets without the apples-to-apples comparisons of audience size and CPM to evaluate whether or not they’re making a sound advertising buy.
But, at this point in its history, it’s clear that SiriusXM has evolved past the “Will They Survive?” stage that hounded them prior to the merger of Sirius Satellite and XM Radio. Programming is rock solid. All four major sports leagues (MLB, NFL, NBA and NHL) broadcast their games on SiruisXM. And a long line up air talent including Howard Stern, Martha Stewart, Oprah Winfrey, Dr. Laura, Jamie Foxx, Opie & Anthony, Bob Edwards, Bob Dylan and Chris “Mad Dog” Russo have infused SiriusXM programming with the personality needed to cement this brand as a permanent part of the radio spectrum.
Year-round advertisers “cluster” channels together to create customized buys that deliver any advertiser’s target. If you’d like to see how that customized approach to radio advertising would apply to your brand, click HERE for a free consultation and a plan.
Mark Lipsky is the President and CEO of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above.Visit our website TheRadioAgency.com