Thursday, March 29, 2007

Sidak Research Incomplete On Conversion Rates

March 29, 2007

The more I read this Criterion Economics report the more I find holes in it. This one report alone is 91 pages, and the number of inaccuracies will provide for a long series of articles tied to this subject.

In yet another section of the report, Sidak states:

"In addition to low churn rates another indication for inelastic demand for SDARS is the high conversion rate. The conversion rate is defined as the percentage of customers who sign a contract with an SDARS provider after sampling the service for three months free of charge. During 2003 XM was able able to convert nearly three quarters of all customers who were on a three month free trial. During 2004 through 2005, the conversion rate decreased to 60 percent, yet was still impressive. The high conversion rate suggests that SDARS customers would not substitute toward another radio service in response to a small price increase for SDARS"

Mr. Sidak........where is the most current conversion rate data????? Was that data missing or just conveniently omitted from the report??????

2003 conversion was reported at a bit over 70%. What you fail to state is that subsequent to that report XM corrected several parts of their billing system and weeded out bad accounts and people receiving free service beyond the three month period. It was then that the rate dropped to 60%......then 55%.....and the LATEST DATA is at about 52%.

Yes a 52% take rate is decent. However, consider the amount of money invested into those consumers. This is money that the terrestrial radio stations need not invest.

I apologize, but I must ask again......WHAT IS THE REASON YOU NEGLECTED TO PROVIDE THE LATEST DATA????????

Labels: c3sr, criterion economics, merger