With regard to the Adjustment of Rates and Terms for Pre-Existing Subscription Services and Satellite Digital Audio Radio Services (XM and Sirius), much of SoundExchange's position relies on a 427 page survey conducted by Professor Yoram (Jerry) Wind, Lauder Professor and Professor of Marketing, The Wharton School, University of Pennsylvania. It's a good survey and, not surprisingly, Wind comes to the conclusion that music is why most people subscribe to satellite radio. My major problem with it is that he divides and conquers. He compares music against several categories, such as talk, news, sports, etc. It would have seemed to make more sense for him to concentrate on music versus non-music channels, but, nevertheless, most of the data is there to make whatever comparison one desires. From another study, it seems that the going rate for these studies is on order of $400 an hour, $200 for junior assistants. No doubt, they paid a bundle for this study. Satellite radio would do well to pay attention to the results.
Wind was hired by SoundExchange (RIAA more or less) "to conduct a survey to examine the value that subscribers and potential subscribers to satellite radio place on the various types of programming and the non-programming features of satellite radio." The survey was a double blind study of 428 "randomly" selected individuals that were either Sirius or XM subscribers or individuals considering subscribing within the next 30 days.
He concludes that 43% would drop the service or never subscribe if it lacked music, and, if music weren't available, respondents on average would only be willing to pay $6.15 a month. Music is the "top reason" cited for people subscribing to satellite radio (We would have told them that for half the price). People cite music more than any other category by a 3 to 1 margin (We feel this is an irrelavant statistic. Music versus non music would yield a very different picture.). When asked to allocate 100 points among 7 categories according to relative importance, on average, 44 points were allocated to music. Nearly 49% of the time was spent listening to music. Okay, we get the point.We are surprised the numbers were as low as they are. One mildly surprising result is that music is more important than commercial-free music, by a 2 to 1 margin. So, basically, only one third of the people care that the music is commercial free, if we understand the results correctly. Traffic and weather was not a top three mention for a reason for subscribing by any participant.
He makes one very interesting point regarding recorded content. He said that it was his understanding that the vast majority of the recorded content on the comedy and kids channels were owned by SoundExchange's members and is, therefore, subject to the same compulsory license rate.
He also notes the value of the deals for Stern and Winfrey, then notes that the survey reveals that subscribers value music "two, three, four, or even five times as much as talk and entertainment programming", and concludes that, "This suggests that the market value of music rights is substantially higher than the market value of the talk and entertainment programming rights." The flaw with that argument is that music is available for free on terrestrial radio. If Stern and Winfrey were available for free on terrestrial radio, their value would be much, much less.
There's a lot more there and we encourage you to read the survey. There are plenty of fact, figures, and charts. You can even administer a survey to yourself.
xm sirius satellite radio stocks patent patents trademark copyright experimental licenses wcs eas invest investing fcc
Jump to :: Satellite Radio Techworld Home Page ::