The satellite radio industry finished 2003 with $91 million in subscription sales. This represents a jump from $16 million in 2002, rising from less than $1 million in 2001--the first year that the technology was made available to consumers. The market consists of two players: XM Satellite Radio and Sirius Satellite Radio. XM commanded most of the market share up through 2002, primarily due to the fact that it was first to launch satellite radio service in the U.S. However, by the beginning of the year in 2004, Sirius captured 14% share of the market and continues to push competitively, further reducing XM’s share. By the second quarter of 2004, XM declined further to 83% of the market.

This report explores the hypothesis that the satellite radio industry will continue to achieve exponential growth over the next five years. While competing for share, Sirius and XM will primarily continue to work towards expanding the market as a whole. Survival of the industry will depend highly on continued financing of both major players. Mintel expects that XM and Sirius will receive additional funding in times of financial trouble as many electronics manufacturers, media companies, and automakers have invested substantially in this effort already--some as far back as the early 1990s--and still have a compelling reason to do so.

Considering the infrastructure required to establish a satellite broadcasting network, proliferation of existing partnerships and uncertainty of the viability of the market, satellite radio will most likely not see another entrant in the next five years. However, advances in satellite technology and faster than predicted marketplace growth could make the probability of new entrants greater in the long run.