This excerpt taken from the SIRI 8-K filed Mar 21, 2007.
1. Terrestrial Radio
Foremost among the audio entertainment options available to consumers is terrestrial, over-the-air AM and FM radio. By any measure, and for 80 years, terrestrial radiooffered free of charge to all consumershas been and remains the most dominant form of audio entertainment service by a substantial margin. Nearly 14,000 radio stations exist in the United States today,56 an increase of almost 14 percent over the last ten years.57 Much of the content available over terrestrial radio mirrors that available over satellite radio.58 Approximately 230
56 See News Release, Federal Communications Commission, Broadcast Station Totals as of December 31, 2006, Jan. 26, 2007 (announcing that there were 13,837 full power AM and FM radio stations as of December 31, 2006).
57 See News Release, Federal Communications Commission, Broadcast Station Totals as of December 31, 1996, Jan. 21, 1997 (announcing that there were 12,140 terrestrial radio stations operating in the United States as of December 31, 1996).
58 The extent of this overlap was illustrated during questioning by Representative Anthony Weiner of Sirius CEO Mel Karmazin and NAB President and CEO David Rehr, during the February 28, 2007 hearing before the House Judiciary Committee:
million Americans choose to listen to terrestrial radio each week,59 more than fifteen times the total number of subscribers to satellite radio. These figures are not necessarily surprising when considered in light of the overwhelming ubiquity of terrestrial radios.
Terrestrial radio continues to thrive despite the emergence of competing audio entertainment services. One study noted that 89 percent of Americans aged 15-24a demographic that may be the most likely to adopt new technologiescited terrestrial radio as a
Hearing of the Antitrust Task Force Subcommittee of the House Judiciary Committee, Competition and the Future of Digital Music, Feb. 28, 2007, at 2007 WLNR 4055618.
59 See Arbitron, Radio Today: How America Listens to Radio, 2006 Edition, at 2, at http://www.arbitron.com/downloads/radiotoday06.pdf (last visited Mar. 19, 2007) (estimating that 93 percent of Americans twelve years old and over listen to radio each week); The 2007 Statistical Abstract, The National Data Book, U.S. Census Bureau, at Table 11, at http://www.census.gov/compendia/statab/population/ (estimating 2005 resident population by age). According to another report, this number is even higher. See Bridge Ratings, Digital Media Growth Projections, Feb. 19, 2007, at http://www.bridgeratings.com/press_021907-digitalprojectionsupd.htm (last visited Mar. 15, 2007) (estimating 282 million weekly radio listeners). Even NAB acknowledges terrestrial radios dominance. See Remarks of David Rehr, President and CEO, National Association of Broadcasters, The Future of Broadcasting, The National Press Club October 4, 2006, at http://www.nab.org/AM/Template.cfm?Section=News_room&TEMPLATE=/CM/ContentDispla y.cfm&CONTENTID=6937 (last visited Mar. 17, 2007) (Satellite radio says it has at most 12 million subscribers. By contrast, 260 million people listened to local radio last week. This is week in and week out.).
primary source of music listening in 2006.60 Moreover, research shows that 46 percent of teen- and college-aged owners of MP3 players are also interested in listening to AM/FM radio on their MP3 players.61 The continued dominance of AM/FM radio is further reflected in its ongoing economic clout; for example, in 2005, the largest ten radio operators posted revenue of $9 billion and billions in positive cash flow.62