This excerpt taken from the SIRI 8-K filed Mar 21, 2007.
4. iPods and Other MP3 Players
MP3 players, such as iPods, are characterized by high sound quality and portability, as well as other attractive features, such as integration with car stereo systems. Several features of iPods and other MP3 players have allowed these devices to compete with satellite radio for listeners.86 First, many MP3 players can be connected to online music subscription services, such as Real Networks Rhapsody, Napster 2.0, and Yahoo! Unlimited.87 For example, Rhapsody provides members with access to millions of CD-quality music tracks, which may be listened to as an unlimited package on personal computers and MP3 players.88 In addition to allowing members to listen to hand-selected music, Rhapsodys service also provides subscribers with personalized music suggestions specifically tailored to individuals musical tastes and a multitude of specialized channels that mimic satellite radio music offerings, thereby allowing for
87 Napsters worldwide paid subscription base at the end of 2006 (including university and Japanese subscribers) totaled 556,000, and is expected to increase by 50 percent when subscribers to AOLs music subscription business are transitioned to Napster in late March 2007. Press Release, Napster, Napster Reports Record Sales of $28.4 Million in the Third Quarter; Expects to End Fiscal Year at Record Subscriber Levels, Feb. 8, 2007, at http://www.napster.com/press_releases/pr_070208.html (last visited Mar. 14, 2007).
88 See Ed Sutherland, Rhapsody in MP3, INTERNETNEWS.COM, Sept. 18, 2006, at http://www.internetnews.com/bus-news/article.php/3632686 (last visited Mar. 17, 2007). Rhapsodys subscribers can play individual tracks and radio channels on their computers for $9.99 per month, or on their computer and MP3 player for $14.99 per month. As of October 2006, RealNetworks Rhapsody service had 1.625 million subscribers. In addition, songs may be purchased on an individual basis. Press Release, RealNetworks, RealNetworks Launches Rhapsody 4.0 & Teams to Deliver First Rhapsody-Optimized MP3 Players, Oct. 5, 2006, at http://www.realnetworks.com/company/press/releases/2006/rhap4.html (last visited Mar. 14, 2007).
musical discovery. Similarly, at least one music subscription provider allows subscribers to obtain songs wirelessly.89
Further, the online sites used to download music also provide listeners with the opportunity to select music and programs by browsing different categories and genres of music. For example, iTunes, the website used to download music and podcasts onto an iPod, includes constantly updated lists of popular songs within different genres. iTunes also provides listeners with suggestions for additional songs based on listeners particular song selections. These features allow listeners to choose songs that they want to hear, and also provides them with the opportunity to discover new music and new programs.
Finally, iPods and other MP3 players are regularly used to listen to podcasts. Podcasts, which are generally free, are available on thousands of different subjects, and include independent talk shows along with television and radio programs, including news and sports.90 By mid-2006, over 9.2 million Americans had downloaded a podcast.91 Moreover, additional
90 See Maria Puente, Get an Earful of Offbeat Podcasts, USA TODAY, Mar. 15, 2007, at http://www.usatoday.com/tech/webguide/2007-03-15-podcast-directory_N.htm?csp=34 (last visited Mar. 16, 2007) (Podcasts cost little (except in time) to produce. Theres no pressure to get ratings or sell ads, so a podcaster can decide to continue (or stop) his podcast whether he has 100 regular listeners or 1 million.).
91 NetRatings, Inc., Podcasting Gains an Important Foothold Among U.S. Adult Online Population, According to Nielsen//NetRatings, July 12, 2006, at http://www.nielsen-netratings.com/pr/pr_060712.pdf (last visited Mar. 17, 2007).
research shows that 2.6 million people download a podcast each week, a figure that is expected to nearly triple to 7.7 million people by 2010.92
More than 116 million MP3 players have been sold.93 By the beginning of 2009, this figure will have nearly tripled, as an estimated 341 million MP3 players are projected to have been sold in the United States by that time, with approximately 250 million expected to be in use.94 From mid-2006 to the present, ownership of MP3 players grew by 33 percent.95 There are a variety of accessories available to play such MP3 players in cars, through the vehicles FM radio or tape deck. In addition, Apple recently announced that it has teamed with Ford, General Motors, and Mazda to provide seamless iPod integration across the majority of their brands and models, making it easy for iPod owners to enjoy and control their iPods high-quality sound through their cars stereo system. With the addition of these models, more than 70 percent of
93 Bridge Ratings, Digital Media Growth Projections, Feb. 19, 2007, at http://www.bridgeratings.com/press_021907-digitalprojectionsupd.htm (last visited Mar. 15, 2007).
95 Study: iPod ownership reaches a new high, MACDAILYNEWS, June 30, 2006, at http://www.macdailynews.com/index.php/weblog/comments/10050/ (last visited Mar. 13, 2007) (summarizing results of Ipsos Insight, TEMPO digital music market report).
2007-model US automobiles will offer iPod integration.96 In fact, 60 million U.S. cars are projected to have factory-installed MP3 jacks by 2011.97