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Satellite radio projected to have $2 billion impact on Canadian economy
3/2/2005

 
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Satellite/Subscription Radio
TORONTO - A new consumer survey commissioned by Canada's two satellite radio applicants, Canadian Satellite Radio and Sirius Radio Canada, suggests that there is significant commercial potential for satellite radio in Canada. Highlights of the survey shows that almost one-fifth of Canadians, or up to 4 million people, would express an interest in subscribing to a Canadian satellite radio service within the next year if it were to become available.

The two satellite radio applicants have estimated that the Canadian economy will receive a significant benefit - $2 billion in overall economic activity�over the next decade should the CRTC approve satellite radio for sale in Canada. Factored into this direct benefit to the economy are artists royalties and development funding, retailer revenue, auto manufacturing, marketing costs, shipping and distribution, production fees, installations, salaries, subscription fees and various government taxes.

From February 10-13, 2005, Decima Research surveyed 2,005 adult Canadians to gauge awareness of satellite radio services in Canada, understand the extent of the appeal of satellite radio and explore knowledge levels about the structure and nature of the satellite radio market at present.

The survey is the largest and most detailed to date on measuring Canadians' interest in satellite radio. One of the primary discoveries was that a considerable "grey market" potential exists for satellite radio in Canada. Grey market is the definition given to Canadian citizens who subscribe to satellite radio service using a U.S. address. As U.S. satellite providers are not authorized to sell to non-U.S. customers, this creates a grey area in the regulation of satellite radio use.

"With 17 per cent of Canadians saying that they would definitely or probably subscribe if the licence is granted, interest in satellite radio for Canada is already here," said Stephen Tapp, president and COO of Canadian Satellite Radio.

"The rapid adoption of satellite radio in the U.S. coupled with the growing awareness of this technology in Canada will only strengthen the growing grey market phenomenon here. Conservatively, we believe that the estimated benefit to Canada, should the two satellite radio applicants be approved by the CRTC, could reach $2 billion during the next 10 years."

Eight per cent of Canadians said they plan to subscribe to a U.S.-based satellite radio service within the next year if the Canadian Government does not licence satellite radio in Canada, which translates to two million Canadians.

"With an increasing number of independent retailers selling satellite radio and consumers now asking for it in-store, we want to ensure that this fast growing consumer technology is legally available in Canada," said Brian Levy, CEO of InterTan Canada, parent company to Radio Shack Canada. "Based on our past experience, I don't think that forcing Canadians into the grey market does anything other than inconvenience citizens and reinforce the old notion that to buy the newest technologies, you must spend your loonies in the United States. Forcing people into that situation isn't right for consumers, and it deprives the nation of tax revenue, in addition to damaging Canadian retailers."

Canadian Satellite Radio and Sirius Radio Canada await a CRTC licensing decision on subscription-based satellite radio services. The applicants made their final proposals to the CRTC in early November 2004.

The survey reported that:

� Seventeen per cent of adult Canadians would definitely or probably subscribe to satellite radio within the next year if a Canadian satellite radio service was available;
� Those who have some prior awareness of satellite radio are more enthusiastic about becoming subscribers. Those familiar with the
concept are almost twice (24% vs. 14%) as likely to indicate they would definitely or probably subscribe;
� Similarly, those who have direct experience listening to music, news, or sports on satellite radio are even more likely (33%) to say they would subscribe to a Canadian satellite radio service;
� If a Canadian alternative was not approved, eight per cent of Canadians would still subscribe through a U.S.-based service within the next year;
� Indications are that more variety, better clarity, mobility, and commercial-free programming will be key drivers of adoption of
satellite radio.

"This is one of the fastest growing technologies we have seen in a long time and it is expected to generate more than 52 million subscribers in the U.S. market alone by 2015," said Levy. "Consumer interest has outpaced terrestrial radio, television, cable TV and VCRs. It is showing a growth trend like satellite TV did a decade ago. I just don't see how or why we can or should stop the adoption of this technology. It is critical that we give Canadians a reasonable opportunity to enjoy this significant innovation and be a part of this growth."

The Decima Research survey was conducted on behalf of Canadian Satellite Radio and Sirius Radio Canada from February 10 to February 13, 2005. For the survey, a representative randomly selected sample of 2,005 adult Canadians was interviewed by telephone. With a sample of this size, the results are considered accurate to within (+/-) 2.2 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled.

The margin of error is larger within regions and for other sub-groupings of the survey population. These data were weighted to ensure the sample's regional and age/gender composition reflects that of the actual Canadian population according to the 2001 Census data.

Founded summer 2002, Canadian Satellite Radio was formed to provide subscription-based satellite radio service to Canadians in both English and French. Canadian Satellite Radio is a Canadian-owned and controlled company in partnership with XM Satellite Radio of the United States, which currently offers more than 130 channels of music, news and entertainment programming to its subscribers for a monthly fee. Via two satellites in geostationary orbit, XM Satellite Radio provides unparalleled audio entertainment across the continent, in digital quality sound. For more information about what CSR has to offer, visit www.cdnsatrad.com.



 
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When it comes to the three subscription radio applications to be heard by the CRTC November (see this site for stories explaining it), should the Commission:
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Approve none?