It turns out that people who have Sirius Satellite Radio (NASDAQ: SIRI) packaged into their new cars are not anywhere near as likely to renew their service as people who go out and buy the service in the aftermarket.
The same holds true for consumers getting XM Satellite (NASDAQ: XMSR).
The New York Times writes that SIRI and XMSR "added about 3.7 million subscriptions last year, according to David Bank, an analyst at RBC Capital Markets, and some 79 percent of those were from promotions to car buyers or leasers." People who get their service with a new car are only likely to re-up the service 40% of the time. That compares with a 66% renewal rate for consumers who went out and got satellite radio to install in their current vehicle.
The numbers are not exactly promising.
Douglas A. McIntyre