PUBLIC RECEPTIVE TO DIGITAL RADIO, BUT HALF WON'T PAY—CEA
Consumers are a captive audience primed for the improved sound quality and advanced data services of digital terrestrial and satellite radio, a new CEA survey found. Interest in each format was most pronounced among 18-34-year- olds, with women of all age groups more eager than men for satellite reception. But selling subscriptions for radio poses a challenge to the satellite industry, with more than half of respondents in all demographics saying they're unwilling to pay for a subscription, CEA said Tues.
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The CEA survey found most consumers (94%) listened to radio in the car, and a majority of those (67%) said they believed the sound quality of radio wasn’t as good as CDs. The survey was conducted in March via the Internet to a representative online sample of 1,160 U.S. adults, the CEA said.
The CEA said 49% of those surveyed were either “somewhat” or “very interested” in radio that could provide CD quality sound. It found that consumers also were somewhat or very interested in digital technology’s ability to display information, including weather reports (62%), traffic updates (51%), song title and artist (50%).
Overall, digital terrestrial radio had an edge on satellite among the survey’s respondents. Interest declined with age -- more so for satellite than terrestrial, the CEA said. Among those 35-44, interest level was 56% for terrestrial and 49% for satellite, and in 45-54 group, numbers were 56% vs. 46%. Interest in “free” digital terrestrial remained steady at 55% among the 55-plus demographic, but a satellite subscription interested only 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,” said Sean Wargo, CEA senior market analyst. XM Satellite began service in Nov. 2001, Sirius Satellite Radio in Feb. 2002. Digital terrestrial “in-band, on-channel” (IBOC) technology was cleared for launch early last year, and is operating at handful of stations, CEA said.
Among the survey respondents, 51% said they were unwilling to pay for radio service, CEA said, although Wargo said “history has shown through the launch of cable TV in the 60s, consumers will pay more to receive access to higher quality and greater choice.”