Diffusion of Satellite Radio

1
Diffusion of Satellite Radio

• Ron Denny
• CJ 454 Diffusion of Technological Innovations

2
Background

• Three main services worldwide.
• Two main services launched in the U.S. in 2001
  and 2002.
• Subscriptions are just starting to gain momentum.

3
Background Cont.

• Approximately 2,050,000 U.S. subscribers
• Can be compared to the diffusion of cable
  television services.

4
Perceived Relative Advantages

• Each network has over 100 channels.
• Premium content (CNN, BBC, ESPN, etc.).
• Comparative low price for subscription.
• Not subject to federal indecency scrutiny.
• Music radio is commercial free.

5
Barriers to diffusion

• Requires an investment in special hardware to
  receive the signal.
• Each network uses proprietary hardware.
  Therefore, the hardware is not interchangeable
  between the competing networks.
• Must overcome the paradigm consumers have of not
  paying for radio services.

6
Sirius Satellite Radio

• Approximately 350,000 subscribers.
• Launched July 1, 2002.

7
Sirius Technology Overview

• Utilizes three Loral FS1300 satellites in unique
  elliptical orbits.
• Less dependent on repeaters than competing
  services.

8
Sirius Subscribers
Data from Sirius News Releases
9
XM Radio

• Approximately 1,700,000 subscribers
• Launched on September 25, 2001

10
XM Technology Overview
Image from XM Radio
11
XM Subscribers
Data from XM News Releases
12
Total Satellite Radio Subscriptions
Data from XM and Sirius News Releases
13
Silent Success

• Subscription growth has been quite high.
• XM Radio 1.7 million subscribers.
• TiVo 1.3 million subscribers.

14
Current Subscriber Statistics
Image from Satellite Radio at ZonaLatina.com
15
Current Subscriber Statistics Continued
Image from Satellite Radio at ZonaLatina.com
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Satellite Radio Attributes of Diffusion

• Relative Advantage Substantial content.
• Compatibility Operates similar to a standard FM
  radio receiver. Variety of content.
• Complexity Minimal. Similar to standard radio.
• Trialability Increasing with factory installs.
• Observability Increasing as peers adopt the
  radios.

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Currently still a niche market
Estimated total U.S. radio listeners each week is
227,248,189 (This is approximately 95 of the
U.S. population over the age of 12, Future of
Music Coalition). Current number of Subscribers
of Satellite Radio is 2,050,000. Satellite is
just under one percent of number of total radio
listeners in the United States.
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Conclusions

• The services are advancing on the S-shaped Curve
  of adopter distribution.
• Currently still a niche market.
• Increased content available to subscribers who
  are often dissatisfied with lack of choice on the
  standard FM and AM bands.
• Increasing factory installs are yielding an
  increase in subscribers.

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References

• How Stuff Works. (n.d.). How Satellite Radio
  Works. Retrieved April 30, 2004, from
  http//www.howstuffworks.com/satellite-radio.htm
• Space.com. November 12, 2003. Satellite Radio
  How it Works. Retrieved April 30, 2004, from
  http//www.space.com/businesstechnology/technology
  /satcom_radio_operations_031112.html
• XM Radio (xmradio.com). April 1, 2004. XM
  SATELLITE RADIO TOPS MORE THAN 1,680,000
  SUBSCRIBERS. Retrieved April 30, 2004, from
  http//xmradio.com/newsroom/screen/pr_2004_04_01a.
  html
• ZonaLatina. April 27, 2004. Satellite Radio.
  Retrieved April 30, 2004, from http//www.zonalati
  na.com/Zldata355.htm

• SiliconValley.com. March 04, 2004. TiVo trims
  loss, adds 330,000 subscribers. Retrieved April
  30, 2004, from http//www.siliconvalley.com/mld/si
  liconvalley/news/8107827.htm
• Space.com. November 12, 2003. Satellite Radio
  How it Works. Retrieved April 30, 2004, from
  http//www.space.com/businesstechnology/technology
  /satcom_radio_operations_031112.html
• XM Radio (xmradio.com). April 1, 2004. XM
  SATELLITE RADIO TOPS MORE THAN 1,680,000
  SUBSCRIBERS. Retrieved April 30, 2004, from
  http//xmradio.com/newsroom/screen/pr_2004_04_01a.
  html
• ZonaLatina. April 27, 2004. Satellite Radio.
  Retrieved April 30, 2004, from http//www.zonalati
  na.com/Zldata355.htm

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Questions?

• e-mail ron_at_turbokinetic.com