Satellite Radio Finally Gaining Traction In Youth Market

After more than four years of tracking satellite radio penetration and planned subscriptions among teens and college students, we are finally starting to see some serious, measurable growth in the category. After more than two years of overall penetration for both carriers at less than 3% of all college students nationally, this spring we saw the number more than double to 8% of all students. Among the 8%, and much like the trend among the general U.S. population, Sirius is catching up to XM in terms of total subscribers, with Sirius capturing 3% of all students and XM securing 5%. So, the real question is, why is satellite radio finally catching on, and please don't tell me because Howard Stern is now on Sirius. He may be huge for the broader U.S. population, but among college students specifically, only a relatively small percentage (less than 8%) listen to talk radio shows on a regular basis. What's more, we asked some of our panelists late last year as Howard was making the transition to Sirius if they were interested in subscribing to Sirius, again, only a tiny percentage (less than 3%) said they were at least "somewhat interested." So, back to the question, what is it. We believe it is two-fold. The first factor is the growing percentage of college students acquiring new vehicles in the past year that are already equipped with service from either XM or Sirius. We've noted an increase in the number of students who are purchasing new vehicles instead of used vehicles in the past two years, and this could help explain part of the growth pattern. Secondly, as it relates to the content offered by each major provider, the amount of sports and entertainment coverage along with the hundreds of commercial free stations is beginning to resonate with some segments of the audience, mainly older students 21+, who live off campus and have some level of a commute to class. Would you rather listen to 7 spots on your way to school or catch three songs? You can guess the answer. If anyone else has any ideas on what's going on in the satellite radio category, I'd love to hear your thoughts.