Scenes from the Marketplace…
Normally, I try to leave the “deep think” pieces to BenDee, since he has twice the writing talent I do, but I’ve had some experiences lately that might generate some light on what’s happening in the SDARS marketplace. The data here is merely anecdotal, so don’t think it’s a complete explanation, but I don’t think it’s without value…
Scene 1: My family recently bought a used van from a major Chevy dealer in the western Denver suburbs. Like any dealer experience, there was plenty of “hold on while I check with…”, so we probably spent 3.5 hours in the dealership. Having an interest in satellite radio, I naturally wondered over to the XM kiosk on the sales floor. I thought the presentation was pretty good, but also noticed that the salesmen had switched the radio off of XM, and over to a popular FM station. I can’t imagine that these guys sell the satellite radio option very hard. It’s possible Sirius does a better job with their partners, but if they don’t, I wouldn’t be shocked. Both XM and Sirius need to be following up with their OEM partners to insure that the kiosks are helping to sell the product, not their terrestrial competition.
Scene 2: New van means looking at backseat video options. So we head over to the local blue big box, to scope out mobile video options that will support the aftermarket Sirius Backseat TV tuner. While talking to the sales associate, I turn the topic to satellite radio. He tells me that at their store, Sirius outsells XM 3-1. (As it appears from the Q2 conference call, most stores do.) I asked, “Why is that, Stern, NASCAR…?” He told me the number one differentiator in their store is the NFL. They say NFL is on Sirius and people say, then that’s the one I want. I understand that baseball is the radio game, but for selling satrad, it looks like America’s favorite sport is still top dog.
Scene 3: While waiting to get the Backseat TV tuner, we still have to have Sirius in the van! It turns out that most late model cars require expensive wiring harnesses if you want to replace the OEM radio. The OEM’s are running lots of the dash electronics, including warning lights, and safety equipment through the same wiring that goes to the radio. Everyone I talked to about getting this work done, expressed that the increased sophistication in OEM radios was making it harder for them to sell satellite radio. For the sizable number of people interested in satrad, but unwilling to clutter their dash with a PNP, this makes it more expensive for them to replace the deck with one that supports their provider of choice. And in many cases replacing the OEM radio means loosing functionality, like steering wheel controls. None of this is news of course, but hearing that sales folks think it makes satrad a harder sale might be news.
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