A Look At Bridge Ratings
May 18, 2006
Bridge Ratings does an analysis on the satellite radio sector that many people invested in the sector sometimes refer to.
Certain aspects of their analysis are vary valuable, and show trending and brand awareness quite nicely, but other aspects of their data have not been received as very accurate by some. In particular, their subscriber projections (which exclude OEM, as does NPD) seem raise a lot of eyebrows on message boards and from investors in the satellite radio sector.
Bridge Ratings, according to their site, conducts their surveys in San Diego, Phoenix, Boston, Detroit, and New York, and this sampling may be the root of some of the issues regarding subscribers projections. In the past they have stated that they survey big box stores such as Best Buy and Circuit City.
Bridge Ratings have been consistently different than NPD. By contrast, NPD surveys retailers based on actual sales on a nation wide basis, and not a general survey such that Bridge Ratings conducts in selected markets.
The spread between Bridge and NPD can be substantial. In April NPD reported that the retail split was 54% Sirius and 46% XM, and this was based on nation wide actual retail sales. Bridge Ratings has April at 45% Sirius and 55% XM based on selected markets and some extrapolation.
The problem that I see with the Bridge Ratings subscriber projections (and this is my opinion) is that they seem to not only misjudge the retail market share, but also seem to have very high subscriber projection numbers that will create expectations that simply are not realistic.
Last year April was the 10th best retail month for satellite radio according to NPD. May was the 6th best month. How can it be that Bridge Ratings is projecting 809,059 retail subscribers SO FAR in quarter 2? The number is extremely HIGH, and June last year was the 3rd best satellite radio sales month according to NPD. The Bridge ratings retail projections are rivaling, and will likely exceed (if they continue their current extrapolation method), fourth quarter 2005 numbers! I am sorry to say, but this simply is not the case. The second quarter will be very healthy for satellite radio, but it appears that Bridge Ratings has Sirius and XM on steroids at this point.
Satellite Standard Group is not saying that Bridge ratings is wrong, but given historical subscriber levels, and reasonable projected levels for this year, we find that the current Q2 projections from Bridge Ratings are overstated. This is only our opinion, readers need to come to their own conclusion. Perhaps some additional clarity on what stores were surveyed, and what assumptions were made can shed light on this subject.
SSG readers can see the current Bridge Ratings Data
HEREReaders can access the General Bridge ratings site
HEREReaders that want to ask questions about the data can email
info@bridgeratings.com5/18/2006 10:07:00 AM
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