Digital Content Drives Auto Radio Sales.24 Million Automotive Satellite Radio Subscribers To Reach 24M by 2010

Strategy Analytics : The dominance of XM and Sirius in North American automotive digital radio, illustrating how investment in content is driving growth. The emergence of terrestrial broadcasters using HD Radio/iBiquity in 2006 will, however, impact satellite growth rates. The European automotive digital radio market will be based on audio hardware upgrade and is plagued by a lack of consensus on standards as well as slow broadcaster commitment to infrastructure and content development outside the UK and Germany. A subscription-based business model will not succeed in the European digital radio market. Across all regions, the availability of digital radio content, systems and pricing will dictate consumer adoption rates in home, automotive and portable markets. Digital radio is currently a subscription-based US market, dominated by XM and Sirius. Satellite players have invested heavily in content, particularly in major league sports, talk shows, road traffic information (RTI) and weather. By 2010, over 15 Million in-vehicle digital radio systems will be shipped annually (OE and aftermarket) across North America, Europe and Japan, over 75 percent of which will come from North America. By that time XM and Sirius together, will have an automotive subscriber base of over 24 Million users - assuming an 80 percent customer retention rate. To date, radio has been the principle and most clear-cut automotive entertainment feature. However, the increasing availability of digital radio, FM and digital radio via cellular phone and portable entertainment players, as well as RTI over radio, will result in major competitive and complementary positioning issues for automotive product planners longer term. Over the next 2 years however, the automotive focus needs to be on those digital radio markets where content and suppliers are driving adoption."

Automotive Digital Radio - Content Driving Adoption Publ 20051208 Digital audio? Wikipedia