CEA Finds Consumers Interested in Digital and Satellite Radio Features

Consumers are a captive audience primed for many of the benefits that terrestrial digital and satellite digital radio has to offer – so says the Consumer Electronics Association.
CEA’s survey found that most consumers (94%) listen to the radio in their cars, and the majority of those (67%) believe the sound quality of their radios is not as good as that of CDs. According results of the March 2003 survey, consumers also are attracted to the ability of digital and satellite radio to display a variety of data such as song title and artist, traffic reports and, especially, weather updates.
The study found that while gender has no effect on one’s interest in digital radio, age has a significant impact. Consumers in the 18-34 age group show a greater interest in digital radio than those 35 and older (69% vs. 56%). Forty-nine percent of consumers reported that they are somewhat or very interested in satellite radio that could provide CD quality sound.
Women show more interest in satellite radio then men (51% vs. 46%). As with digital radio, interest in satellite radio declines with age. Interest level among 18-34 year olds outpaced that of 55+ year olds (63% vs. 38%).
“This study shows that there is significant interest, and a very specific market demographic which is primed for digital radio and satellite radio services,” stated Sean Wargo, CEA senior market analyst. “This is a very new industry, but clearly manufacturers and retailers can tap into an already existing group of consumers.”
The study found that in addition to improved sound quality, consumers also are somewhat or very interested in the technology’s ability to display information, including weather reports (62%), traffic updates (51%), and song title and artist (50%).
“The challenge for satellite radio will be selling consumers on the notion of paying for radio, since many consumers (50%) said they would not be willing to pay the extra fee for satellite radio service,” Wargo stated. “However, history has shown through the launch of cable TV in the 60’s, consumers will pay more to receive access to higher quality and greater choice.”
Some companies are exploring a range of services to offer via addressable satellite radios such as remotely unlocking a car, remotely starting the engine and delivering customized data.
In November 2001, XM Satellite launched the first satellite radio service, soon followed by Sirius Satellite Radio in February of 2002. Since the launch of these services, CEA has tracked factory-to-dealer sales of more than 600,000 units of satellite radio modulators in the aftermarket, bringing nearly $100 million in revenue to the industry.
In the fall of 2002, WOR(AM), New York, became the first terrestrial station to broadcast 24/7 with a digital signal in addition to its analog signal.
Data cited came from reports designed and formulated by eBrain Market Research. The Internet study sampled more than 1,000 U.S. adults in March.