Radio's space invasion not so out of this world by Shawn Ohler
Source : Edmonton Journal
December 28, 2006
EDMONTON - When satellite radio beamed into Canada a year ago, bullish industry analysts predicted conventional radio would soon be consigned to dusty museum shelves beside hand-cranked Victrolas and eight-track car stereos.
But Canadian AM and FM radio stations are showing surprising resilience in the face of competition from satellite radio's giant new entries, Sirius and XM. An analysis of Bureau of Broadcast Measurement radio ratings from the last 12 months, which measure how many Canadians tune to the AM and FM dial, shows that conventional radio stations in every major Canadian market have held virtually all their audience.
In Edmonton, where conventional radio listenership dipped just two per cent since SIRIUS and XM debuted a year ago, six stations actually gained listeners over the past year. One of them, 91.7 The Bounce, goes after the same young listeners targeted by satellite, yet it increased its audience by almost 24,000.
James Stuart, Bounce's general manager and program director, acknowledges he was concerned a year ago about the threat posed by satellite radio.
"Last November, I was thinking: 'This is something we're going to have to be vigilant about,' " Stuart said.
"Now, my day does not consist of thinking for a second what satellite is doing to take my listeners."
While Sirius has sold more than 200,000 subscriptions nationwide and XM has an estimated 115,000 paying customers -- and both companies offer hundreds of channels of commercial-free music, talk and entertainment -- Stuart said he's much more concerned with local FM competitors.
"My own personal opinion is that satellite radio hasn't done what they said they'd do. They wanted to become a must-have thing, and they haven't."
The heads of both Sirius and XM insist they're thrilled with their first-year numbers and claim they never shared the analysts' view that satellite radio would bleed their "terrestrial" counterparts of major listenership.
"No, not at all. And these are early days, man. We've never stood on our hind legs and said: 'Be afraid, terrestrial radio!' " said XM president Stephen Tapp, a Toronto broadcasting veteran whose easygoing manner suggests his first-ever career ambition: FM radio disc jockey. "We're complementary. Our job isn't to take share away from terrestrial radio, necessarily. Maybe our job is to give people more reason to listen to radio."
Tapp said satellite radio has shown huge strength in smaller markets like Grande Prairie, which is perennially under-serviced by conventional radio. Tapp's boss, XM CEO John Bitove Jr., travelled to Grande Prairie in the fall where he announced its Future Shop store is Canada's biggest seller of XM radios. (That store's manager says it sells even more Sirius packages.)
'EQUAL ACCESS'
"We believe satellite radio's real advantage to Canadians is equal access, so if you're in a small rural farming community, or in downtown Toronto, that rural kid gets similar and equal choice to those in urban markets," Tapp said.
Sirius president Mark Redmond likens satellite radio's growth to "what satellite television saw in its first few years," with early adopters in rural areas driving the business until urban Canada catches up.
"You go into Fort McMurray which has two or three terrestrial radio channels and we walk in with 110 -- that's compelling. Part of our strategy was to go after the rural markets," Redmond said.
"And if you look at what we've accomplished in less than 12 months, that's pretty significant growth, especially when you compare it to the growth of MP3 players, satellite TV and even back to the introduction of cellphones. We've been adopted more quickly than any of those technologies."
But Doug Rutherford, an Edmonton radio dean and general manager of Corus's four local stations, said he guesses the satellite moguls are putting on a brave face.
"I don't know if they're having the kind of success (in Canada) they thought they might have had," said Rutherford, a 35-year broadcasting vet whose local stable includes talk powerhouse CHED and the dominant country outlet on the dial, CISN.
"We're not afraid of the competition. We've run ads for (Sirius and XM). But at the end of the day, they have no local presence. We still think you're going to come to 630 CHED because you want to know what's going on down the street and the other side of town."
Rutherford said analysts have warned of conventional radio's impending death for decades, since the introduction of television through to the early installation of CD players in cars up to the recent cultural emergence of the iPod.
"As long as we keep figuring out how to program our radio stations to take that competition on, we'll be fine."
sohler@thejournal.canwest.com
TUNING IN, BUT NOT DROPPING OUT
Here's a look at the AM and FM radio audience, in thousands, in fall 2005 (before satellite radio was introduced in Canada) and this past fall.*
City 2005 2006 +/-%
Halifax 531.5 604.7 +13.8
Montreal (English) 1240.7 1239.3 -0.1
Toronto 9544.4 9542.3 -0.1
Winnipeg 1178 1174.7 -0.3
Edmonton 1720.3 1677.9 -2.5
Calgary 1747 1700.6 -2.7
Source: Bureau of Broadcast Management top-line radio statistics, fall 2005 and fall 2006; figures cited combine a market's "Central Reach" audience for every AM and FM station.
*Many people report listening to more than one station.
© Edmonton Journal
But Canadian AM and FM radio stations are showing surprising resilience in the face of competition from satellite radio's giant new entries, Sirius and XM. An analysis of Bureau of Broadcast Measurement radio ratings from the last 12 months, which measure how many Canadians tune to the AM and FM dial, shows that conventional radio stations in every major Canadian market have held virtually all their audience.
In Edmonton, where conventional radio listenership dipped just two per cent since SIRIUS and XM debuted a year ago, six stations actually gained listeners over the past year. One of them, 91.7 The Bounce, goes after the same young listeners targeted by satellite, yet it increased its audience by almost 24,000.
James Stuart, Bounce's general manager and program director, acknowledges he was concerned a year ago about the threat posed by satellite radio.
"Last November, I was thinking: 'This is something we're going to have to be vigilant about,' " Stuart said.
"Now, my day does not consist of thinking for a second what satellite is doing to take my listeners."
While Sirius has sold more than 200,000 subscriptions nationwide and XM has an estimated 115,000 paying customers -- and both companies offer hundreds of channels of commercial-free music, talk and entertainment -- Stuart said he's much more concerned with local FM competitors.
"My own personal opinion is that satellite radio hasn't done what they said they'd do. They wanted to become a must-have thing, and they haven't."
The heads of both Sirius and XM insist they're thrilled with their first-year numbers and claim they never shared the analysts' view that satellite radio would bleed their "terrestrial" counterparts of major listenership.
"No, not at all. And these are early days, man. We've never stood on our hind legs and said: 'Be afraid, terrestrial radio!' " said XM president Stephen Tapp, a Toronto broadcasting veteran whose easygoing manner suggests his first-ever career ambition: FM radio disc jockey. "We're complementary. Our job isn't to take share away from terrestrial radio, necessarily. Maybe our job is to give people more reason to listen to radio."
Tapp said satellite radio has shown huge strength in smaller markets like Grande Prairie, which is perennially under-serviced by conventional radio. Tapp's boss, XM CEO John Bitove Jr., travelled to Grande Prairie in the fall where he announced its Future Shop store is Canada's biggest seller of XM radios. (That store's manager says it sells even more Sirius packages.)
'EQUAL ACCESS'
"We believe satellite radio's real advantage to Canadians is equal access, so if you're in a small rural farming community, or in downtown Toronto, that rural kid gets similar and equal choice to those in urban markets," Tapp said.
Sirius president Mark Redmond likens satellite radio's growth to "what satellite television saw in its first few years," with early adopters in rural areas driving the business until urban Canada catches up.
"You go into Fort McMurray which has two or three terrestrial radio channels and we walk in with 110 -- that's compelling. Part of our strategy was to go after the rural markets," Redmond said.
"And if you look at what we've accomplished in less than 12 months, that's pretty significant growth, especially when you compare it to the growth of MP3 players, satellite TV and even back to the introduction of cellphones. We've been adopted more quickly than any of those technologies."
But Doug Rutherford, an Edmonton radio dean and general manager of Corus's four local stations, said he guesses the satellite moguls are putting on a brave face.
"I don't know if they're having the kind of success (in Canada) they thought they might have had," said Rutherford, a 35-year broadcasting vet whose local stable includes talk powerhouse CHED and the dominant country outlet on the dial, CISN.
"We're not afraid of the competition. We've run ads for (Sirius and XM). But at the end of the day, they have no local presence. We still think you're going to come to 630 CHED because you want to know what's going on down the street and the other side of town."
Rutherford said analysts have warned of conventional radio's impending death for decades, since the introduction of television through to the early installation of CD players in cars up to the recent cultural emergence of the iPod.
"As long as we keep figuring out how to program our radio stations to take that competition on, we'll be fine."
sohler@thejournal.canwest.com
TUNING IN, BUT NOT DROPPING OUT
Here's a look at the AM and FM radio audience, in thousands, in fall 2005 (before satellite radio was introduced in Canada) and this past fall.*
City 2005 2006 +/-%
Halifax 531.5 604.7 +13.8
Montreal (English) 1240.7 1239.3 -0.1
Toronto 9544.4 9542.3 -0.1
Winnipeg 1178 1174.7 -0.3
Edmonton 1720.3 1677.9 -2.5
Calgary 1747 1700.6 -2.7
Source: Bureau of Broadcast Management top-line radio statistics, fall 2005 and fall 2006; figures cited combine a market's "Central Reach" audience for every AM and FM station.
*Many people report listening to more than one station.
© Edmonton Journal
