The battle over your car stereo: Where satellite radio stands against streaming services
XM/Sirius dominate the car satellite market, and car sales have bounced back right along with the rest of the economy. But will their success continue against a future of Rdio, Pandora and Spotify?
As Sirius XM reports its earnings today, there are a few figures that have been good for the satellite radio company: Half of listeners coming off of a trial subscription stay on to become paid subscribers. Most of those paid subscribers are car buyers. 70 percent of new cars roll off the lot with satellite radio installed, a company spokesman said.
That partnership with automakers has been a smart one, says Peter Leitzinger, an analyst with SNL Kagan.
"They're just basically focusing in on new cars and even used cars," he says.
In the past month alone, Sirius XM announced BMW customers will get a one-year subscription with purchase of a new car. And Kia dealers offer free trials for used car buyers.
But people mostly listen to satellite radio while they're driving. Internet-based radio services like Pandora and Spotify are picking up audience everywhere else -- and experts say they may soon find their way into cars.
"The big focus for automakers is trying to match the pace of automotive development with the pace of technology development," says Jessica Caldwell, senior analyst with Edmunds.com.
She says if car makers start offering Internet radio, it could be a "Sirius" problem for the satellite broadcaster.