Thanks for this opportunity to explain the economic reality behind the statistics.
People will like what they like - and be disappointed if the format changes. Much like CD101 in NYC going to HD Radio. People are disappointed in the loss, but sales of HD have not increased dramatically.
I have not made a single statement about which service offers a better listening experience - but I have pointed out that the programming for both is not fresh or innovative for me.
http://www.orbitcast.com/archives/satellite-radio-subscribers-running-the-numbers.html Total Satellite Radio Subscribers
* Sirius Satellite Radio: 7,667,476
* XM Satellite Radio: 8,570,000
Now the interesting thing to note is that in the past two quarters, Sirius has been consistently three-quarters behind XM.
In other words, Sirius is currently where XM was in 4Q06 (~7.6M). In the 2nd-quarter of this year, Sirius was where XM was in 3Q06 (~7.1M).
Quarterly Net Subscribers
Here there can be no question that Sirius is out pacing XM. For nearly two years, Sirius has had more net subscriber additions than XM has. The most notable being in 4Q06 where Sirius simply destroyed XM in net additions.
* Sirius Satellite Radio: 524,938
* XM Satellite Radio: 315,000
Quarterly Gross Subscribers
Gross subscriber additions shows something different. Here we see near parity when it comes to quarterly subscriber growth.
Since gross subscribers scrubs out the effects of churn, and evens out other factors like including together promotional/non-promotional subscribers, here we can gather a better sense of market penetration. So I really do like to look at gross subscribers over net subscribers when looking at how both are performing.
Again, we see that in 4Q06, there was a tipping point where Sirius now leads XM consistently in gross subscriber additions.
* Sirius Satellite Radio: 999,284
* XM Satellite Radio: 952,000
Sirius' subscriber base is growing .... XM's has levelled off. This enforces Management's thinking that the new programming is bringing in subscribers.
If you've subscribed for a multi-year contract, it doesn't matter whether you listen to the programming or turn it off .... they already have your money (or promotional dollars from your car maker).
It has been well publicized that most of Sirius' new subscribers signed up for Howard Stern. Why on earth would they listen to the Jazz Cafe when they can also listen to Bubba the Love Sponge? All Howard radio, 24 hours a day on Channel 100.
In addition to that, Sirius has the original MTV VJs hosting the all 80's station, Brady Bunch star Barry Williams and Good Times star JJ walker hosting the 70's channel - and similar personalities hosting their themed channels. That draws on the same age demographic that would tune into a Watercolors or a Jazz Cafe.
Meanwhile Watercolors still has human beings talking about music and mentioning songs and artists. Jazz Cafe has pre-recorded voice spots - all the "on air" folks were let go more than a year ago. There's no human touch, while the other Sirius channels have human beings like the MTV VJs.
Listeners like the human touchpoint, not the android-beamed-tracks and elevator like atmosphere. No secret there. That's why Jazz Cafe is lower in Sirius' ratings.
Statistics for each service is.... like going to the Democratic National Convention and polling the convention attendees about whether they are going to vote for Barack Obama. And then, the pollster turns around and goes to the Republican National Convention and asks who is going to vote for John McCain.
How does one compare the results? At this point in time, we couldn't predict who will be President. Polls do not tell the real story when the votes are added up.
The convention polls are 2 closed demographic pools, yielding predictable results. But if one convention has more attendees who answered the question for their candidate - that doesn't mean their candidate will be the next President.
That's been my point about the error of assuming stats prove that one channel is more popular than the other. Neither group of subscribers has had the opportunity to experience the other service - their choices are limited to their satellite service.
Statistically, the numbers are derived from closed demographic pools - and the programming for each service is different.
The numbers indicate that XM subscribers prefer Watercolors to other channels in that service, and that Sirius subscribers are actually listening to Stern instead of Jazz Cafe.
Which channel management chooses will depend upon how much $$$ they can bring in - and that means programming which will appeal to new subscribers.
Bottom line, I would not be surprised.... if both Watercolors & Jazz Cafe went away along with their cousin channels.
We already know that anything with the word "jazz" in it is the programmatic kiss of death. That's why it's evolving into Smooth A/C.
The Watercolors name might survive because it's inconspicuous and evokes a relaxing mood, but the jazz part of the programming will not make the cut. The real estate for other programming is too valuable.
Ohh... and Management will use the ratings to make the cut - in the same way that they let BA make programming decisions based upon limited testing and song recognition factor. It's that purple sofa argument again - if you only have purple sofas available - you'll pick purple even though you really wanted a green sofa.
People will accept the numbers rather than the underlying truth - it's all about making money - and money means bringing in new subscribers, not keeping the ones who are most likely locked into a multi-year subscription.
Sirius/XM or XM/Sirius - can only grow their profits by adding new subscribers.... and slashing costs.