Stern deal: Sirius seeing a big bounce
Stern's big bounce
Oct 21, 2005
The whopping $500 million Sirius Satellite Radio is paying Howard Stern to join the No. 2 celestial radio service might be starting to pay off. According to data from NPD Group, Sirius has been taking away retail-level market share from XM Satellite Radio for three consecutive months, and analysts primarily give credit to Stern.
NPD said that in September, Sirius captured 56% of the satellite radio sales, the best it has done since launching its service in July 2002. That's an improvement over 47% in August and 40% in July.
While CEO Mel Karmazin said the improved sales can be attributed to Martha Stewart joining Sirius and the start of the NFL season as well as the impending arrival of Stern, analysts focused mostly on the latter.
"We have consistently indicated that the arrival of Ho-ward Stern would be a major catalyst," Merrill Lynch analysts wrote after the NPD data was made public this week.
Taking the lead at retail was "not a surprise," the analysts said. "We expect Sirius' lead in retail sales will continue throughout (the year) and early 2006, largely driven by the addition of Howard Stern fans."
Analysts at Sanford Bernstein noted that Sirius' share at retail has risen from 11% in 2002 to 44% last year and 48% in the first half of this year.
Retail sales do not include radios sold already installed in cars -- original equipment manufacturers -- where XM maintains a healthy lead, having launched its service 10 months earlier than Sirius.
Sirius said that it sold 82,000 units at retail last month, a 52% surge over August and a 93% increase from September 2004.
"Since Sirius has a slight disadvantage to XM in the OEM channel, retail channel must be the greater driver for share gains for Sirius," the Sanford Bernstein analysts said.
Observers estimate that retail sales are amounting to about 65% of Sirius sales, while they are representing about 50% at XM.
On Thursday, XM said that it will give a free satellite radio to everyone attending Game 1 of the World Series on Saturday in Chicago, while Sirius said that it hired a new senior vp marketing.
NPD said that in September, Sirius captured 56% of the satellite radio sales, the best it has done since launching its service in July 2002. That's an improvement over 47% in August and 40% in July.
While CEO Mel Karmazin said the improved sales can be attributed to Martha Stewart joining Sirius and the start of the NFL season as well as the impending arrival of Stern, analysts focused mostly on the latter.
"We have consistently indicated that the arrival of Ho-ward Stern would be a major catalyst," Merrill Lynch analysts wrote after the NPD data was made public this week.
Taking the lead at retail was "not a surprise," the analysts said. "We expect Sirius' lead in retail sales will continue throughout (the year) and early 2006, largely driven by the addition of Howard Stern fans."
Analysts at Sanford Bernstein noted that Sirius' share at retail has risen from 11% in 2002 to 44% last year and 48% in the first half of this year.
Retail sales do not include radios sold already installed in cars -- original equipment manufacturers -- where XM maintains a healthy lead, having launched its service 10 months earlier than Sirius.
Sirius said that it sold 82,000 units at retail last month, a 52% surge over August and a 93% increase from September 2004.
"Since Sirius has a slight disadvantage to XM in the OEM channel, retail channel must be the greater driver for share gains for Sirius," the Sanford Bernstein analysts said.
Observers estimate that retail sales are amounting to about 65% of Sirius sales, while they are representing about 50% at XM.
On Thursday, XM said that it will give a free satellite radio to everyone attending Game 1 of the World Series on Saturday in Chicago, while Sirius said that it hired a new senior vp marketing.
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