Sirius XM Should Be Able To Get Ratings

Posted by: David Kiley on September 29, 2008

It’s hard to believe that advertisers and Sirius XM can’t agree on some sort of audience measurement system for satellite radio subscribers.

Advertisers say that any system thee company pays for itself won’t be accepted. But there is no burning desire for Arbitron to spend the money to do a third party audience measurement for one provider.
It would seem that there is a good incentive for both Sirius XM, advertisers and media agencies to get some kind of rating system. The key would seem to be allowing Sirius XM by way of its own satellites to track what people are tuned to in an aggregate fashion. In other words, the ability to read how many people are listening to CNBC, Fox or (right wing) The Patriot during morning and afternoon drive.
This can be done on a sample basis. But I would think the technology would allow a more quantitative approach that would not violate privacy.

There are some 18.5 million satellite radio subscribers. People willing to pay for monthly radio service has got to be a valuable advertising demographic.

Have a third party entity gather the data at least on a trial basis and let media buyers examine the results.

Now that Sirius and XM radio are combined, one would think that CEO Mel Karmazin will try and rationalize some of the high-priced contracts that were so expensive when XM and Sirius were bidding against one another.

Regardless of Karmazin’s insistence that Howard Stern was worth a $500 million contract, I’d have to argue against that logic. Stern had almost nowhere to go in terrestrial radio. If XM hadn’t been out there as a competitor, Stern would have signed for lots less. The two services had been bidding against one another for Major League Baseball, NBA and NFL games as well. It’s hard to believe those contracts won’t be much cheaper to renew, if they are renewed, when they lapse.

Sirius XM has a long way to go with advertisers before it catches up with its terrestrial competitors, however. According to its second-quarter earnings report, advertising revenue for the company for the first half of the year was $16.7 million, an increase from $15.9 million during the same period in 2007. That’s only about 3%-4% of revenues.

As a long-time Sirius subscriber, I will make a few seat-of-the-pants observations about the service.

Most of my in-car listening is CNBC, CNN and Fox TV feeds.

There are waaaaaay too many music offerings. Who wants to listen to someone else’s programming when you can listen to your own ipod?

The Kid’s channels are addictive to small kids. It’s a battle not to put Kidstuff on when I ride with my six-year-old son.

It’s fabulous on a long trip.

If I could pick and choose ads based on my actual interest, and I was incentivized to do so (i.e. free live events, gear from participating advertisers, points to be redeemed like green stamps)I would gladly cherry pick ads that were of interest to me that could be fed to my radio on a channel.

Ad diversity is much needed. I have heard about incorporating in Delaware or Nevada about as much I can stand.

The Sirius Stiletto is a waste of time.

In house reception of sat radio is a pain in the neck. This is a car-based service.

 

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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