Thursday, February 01, 2007

Politics Can Add To The Bottom Line For Satellite Radio

February 1, 2007

A substantial chunk of revenue could well be right around the corner for Sirius and XM, and this should be welcomed news to these companies and those that invest in them.

So where is this potential cash bonanza going to come from?


With the presidential election only 22 months away, the stage for the political battle is already being set, and massive cash donations will make their way to the respective campaigns.

In the 2004 election, it is estimated that over $2,700,000,000 was spent on political advertisers, and unlike the past, where the bulk of this went to television, it was much more widely distributed. Venues such as direct mailers, the internet, and radio saw massive influxes of political ad spending.

Satellite Radio provides a unique opportunity for candidates to disseminate their message on a national scale to a targeted audience.

Looking to appeal to the women's vote? Consider an ad on Martha Stewart or Oprah Winfrey's channels. Want to catch the male demographic, consider MLB radio or NFL radio. Conservative or Liberal voters can be found listening to specific programming on both Sirius and XM, and national news outlets such as Fox News and CNN also have a home on satellite radio. There are many venues from which to choose, and all are broadcast on a national basis.

This potential influx of advertising dollars could not be better timed for the fledgling satellite radio industry. To this point Sirius and XM have been a "new concept" for potential advertisers to look at, and ratings books, the staple to determine audience size, are not provided. This means that not only is satellite radio a new concept, but the determination of the audience is measured by a different metric. To date this has limited the ability of Sirius and XM to gain mass appeal and top dollar for advertising spots. An influx of political ads would not only serve to increase the advertising backlog, but could also help SDARS drive up the pricing structure for advertising. Simply stated, the political advertising dollars could be a booster shot to help get this form of advertising up and running.

If it has not happened yet, Sirius and XM should make it a point to seek out the campaigns of the presidential candidates, and show exactly what they have to offer. There is likely over $3,000,000,000 dollars on the political advertising table, and even 1% of it would mean an infusion of $30,000,000 into the coffers of Sirius and XM.

The potential is there……It is up to Sirius and XM to make the most of it.

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2/01/2007 10:30:00 AM

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