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Wednesday, July 19, 2006

June NPD Numbers are in and SSG has them. GSI is proud to have SSG as part of the Inside SIRIUS Alliance.

In June of 2006 SIRIUS once again dominates the Satellite Radio New Sales.

June 2006

Sirius - 61%
XM - 39%


1. Satellite radio sales were up 59% over the previous month.

2. Satellite radio sales were up .03% over last year

3. Sirius sales were up 78% over the previous month.

4. Sirius sales were up 18% over last year.

5. XM sales were up 36% over the previous month.

6. XM sales were down 19% under last year

In the past NPD has always seemed to "overstate" the retail share of Sirius. In Q1 2006, NPD "understated" the retail share of Sirius by about 6 percentage points (we will know the effect for Q2 when the retail breakdowns are given at the respective conference calls in the coming weeks). This revesal of how NPD compares to the NET retail subscribers as reported by Sirius and XM is likely attributable to Sirius beefing up sales at NON-NPD channels such as Wal Mart, and direct on line sales.

SSG covers what NPD is, and what it tracks below:

Now to address what NPD is and what it tracks. From the NPD Website..."NPD point of sale (POS) information is collected from approximately 600 retail partners that provide store movement information.

NPD partners represent more than 120,000 doors worldwide. Additionally NPD works with distributors in targeted industries to provide comprehensive views of the market. Their network spans key retail distribution channels such as department stores, national chains, specialty stores, mass and more.Equipped with NPD information, retailers and the manufacturers that supply products to them can better understand how their performance compares to what is happening in the rest of the market.

This enables them to identify new opportunities and areas of potential vulnerability so they can be proactive in taking appropriate actions.The POS information provided to NPD from retailers’ cash registers provides participating retailers with product sales and pricing detail for both themselves and the remaining channel or market. This level of detail helps companies assess which products are selling, which are not, at what price points, and in which channels. It also makes it possible for retailers to evaluate their company’s performance in key merchandise categories relative to the aggregate competition. NPD also aggregates its data for certain merchandise categories/classes of trade, providing an even more comprehensive view of changes occurring in the retail marketplace.

What Many People Misunderstand About NPD

On the message boards people often state that the NPD data is not accurate because the percentages do not match up with what Sirius and XM report at the end of the quarter. There is a reason for this and it is as follows:
1. NPD tracks retail sales on a GROSS basis. Retail subscribers reported by Sirius and XM are on a NET basis. Further, there can sometimes be a gap between when a unit is purchased (and thus recorded by NPD), and when the purchaser activates their subscription with either Sirius or XM.

2. The NPD data is indeed accurate. It is based on actual sales of units. Those who call it inaccurate simply are likely misinformed about what NPD is and what it tracks.

3. NPD does not track Wal Mart. It also does not track small independent retailers, nor the sales from Sirius Direct or XM Direct. This is a factor that can skew the percentages that NPD captures vs. the overall percentage comparisons.

4. NPD does capture the sales from the stores that are most responsible for overall sales of satellite radio.

5. NPD does not capture any “give-away” units such as XM’s baseball promotion.The value in the NPD numbers is in comparing how each company is performing at retail stores and chains where most SDARS units are sold. NPD is very good at showing a trend, and very good at illustrating consumer sentiment with regards to which service is more popular.

SSG recommends that before you discount any data that you first comprehend it. Those that choose to ignore the data are not really doing themselves any favors. It is always good to learn and know as much as you can.


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