Prediction: Satellite Radio Will Be Huge

Satellite radio may become one of the most successful communications formats ever launched, according to predictions from market research and analysis company The Yankee Group. A new report suggests that satellite radio will take off the way cable TV did back in the 1970s; the result may create permanent changes in the radio industry.

Among predictions in "Satellite Radio: A New Star on Broadcasting's Horizon" are estimates of over one million receivers installed only one year after the format launches. The Yankee Group claims that 21 million receivers will be in place by the end of five years. Consumers will flock to the new format because it offers clear reception, national coverage, and a wide variety of commercial-free programming for a low monthly fee. "Satellite radio's fee-based programming is a revolutionary concept in the radio world's all-digital service, featuring more variety and fewer ads than traditional radio, similar to cable TV going against free broadcast TV 30 years ago," said analyst Ryan Jones.

Satellite radio services will offer even more channels than cable-based audio services like DMX, which many people enjoy in their homes and offices. Satellite services plan to offer as many as 100 channels of music, news, sports, comedy, and children's programming.

Although stationary receivers will be commonplace, satellite radio is intended primarily for the mobile market, where more than 90% of all radio listening takes place. Toward that end, both Sirius Radio and XM Radio have signed agreements with automakers to have satellite receivers available as optional equipment in new cars, 17 million of which are sold nationally each year. Aftermarket installers, who sell approximately 11 million receivers annually, will also be busy with the new technology. The US autosound market consists of over 180 million drivers.