Sirius XM Looking to Raise Rates

[KC2LDY]

Bloomberg News reported yesterday that Sirius XM Radio Inc. petitioned the FCC on Jan. 20 asking that the agency not extend a freeze on the company's $12.95 basic monthly subscription price. The freeze was negotiated as part of the 2008 merger that formed the company. This doesn't mean a price increase is imminent, of course, but it does indicate how the company is thinking.

In its petition, Sirius XM said it faces a “robustly competitive” market with consumers able to choose terrestrial radio and Internet music services such as Pandora and Rhapsody, while carmakers offer ways to access Web-based entertainment in their cars.

I've said this before and I'll say it again: Sirius XM's business model is all wrong. They should offer a handful of channels for free. There should be one of these channels for, say, each of the major music formats. And they should sell commericals on those channels - but limit them to eight minutes an hour. If people like what they hear, they can subscribe to get the really good stuff.

With all of the XM and Sirius radios out there that came standard with both domestic and foreign cars and trucks over the past five years, I think there would be a surprising amount of listeners. If that doesn't work... Sirius XM can gradually spread commercials to other channels - offering each for free as they so do. The secret is keeping the programming more compelling than what can be found on most terrestrial stations - and keeping it cheap/free and easy for consumers.

And I'll add this: My wife just bought a new Hyundai Tucson, which came with an XM radio and three months of free service. We'd continue to listen to free programming with commericals as long as the programming/music was good and there weren't too many spots. But we are not going to pay one red cent for any of it. Perhaps it's only anecdotal, but I know a lot of people people like us.

 

[Ai4i]

They had originally wanted a commercial service, but lobbyists prevented that from happening.
They are licensed as a subscription service.

 

[RadioFMdude]

Karmazan would only say that the rate hike would be "more than inflation". :

 

[landtuna]

And I'll add this: My wife just bought a new Hyundai Tucson, which came with an XM radio and three months of free service. We'd continue to listen to free programming with commericals as long as the programming/music was good and there weren't too many spots. But we are not going to pay one red cent for any of it. Perhaps it's only anecdotal, but I know a lot of people people like us.

I'm going to opine that the commercial-free aspect of S/XM is their major selling point and going to a commercial-based service, even for a limited number of minutes per hour, could kill their audience. Sat radio is a bonus for people on long trips and truckers now that the blowtorch AM's are virtually gone - especially out West where the FM's fade quickly.

Like you, I just bought a new Hyundai Santa Fe and S/XM is on 90-day trial. I haven't spent a lot of time in the car yet but have flipped around the dial but I don't see anything that makes pay-to-listen worth it either - except maybe on a long road trip (which we probably won't be making with gas prices so high). My SF has CD/MP3/AUX/USB radio inputs so I can use a variety of my personal appliances with my own playlist (which is also commercial-free). For me, that's even better than sat.

One suggestion though. At the end of your trial period you should get a call from S/XM seeing if you want to subscribe. If you tell them their price is too high they will most likely offer it to you at reduced cost. Most of the S/XM subscribers around me seem to be paying about $9/month.

 

[Ai4i]

Or just get a lifetime sub as I did and be done with worrying about payments.

 

[landtuna]

Before subscribing to a multi-year or lifetime plan read the terms and conditions very carefully. There appear to be some nasty surprises for the unwary customer such as:

Transferability to other radio units.
Fee's for transferring.
Changes in S/XM services (at their discretion, not yours).
S/XM upcoming bankruptcy (almost certain to happen).

 

[radiojomo]

First of all, the technology SiriusXM uses to deliver their content right now makes it difficult to run a free service with commercials and a commercial free service at the same time because it would take up more "valuable" bandwidth.

SiriusXM just has to find a way to reduce in-house costs by cutting more personal and dropping heavy contracts like Stern and the countless other celebrities they pay millions to hire. 20 million subs but I doubt there's 20 million Stern listeners. They also have to find a way to make satellite radio fit in everyone's budget and continue to push hard to get SiriusXM in every car and keep Pandora and Slacker out. They should push their "music only" service more and drop the price from $9.99 to $4.99 a month to compete with these subscription internet services. Just a thought...

 

[nocomradio]

I had XM from almost day one, in both my business and the car. That was when they offered true live shows, excellent content, and above all, less chatter. The along came Sirius and it all fell apart. The programming went from great to sorry at best, overnight. Customer service evaporated, and the only attention I ever got from them was asking for more money in the form of upgrades, adding more radios, etc. Any suggestions about improving their service fell on deaf ears.

As far as I am concerned, Sirius/XM can keep their service. I left it about a year ago, and I really don't miss the same boring 300 song playlists I can get for free on my terrestrial radio. I have to put up with the commercials, but I just tune them out anymore, and when I really want decent music, I just load my MP3's and listen all day to some decent quality programming. After all that time with XM, when I decided to ditch the service, the only thing the call taker said to me was simply: "Oh well, we can't make everyone happy. We'll turn off your radio at the end of this billing cycle."

THAT is why they are nearing bankruptcy. They forget about who pays for them to be in business, and they seem to feel that providing substandard garbage on the airwaves is a great business model. All the ad time they can sell and all the rate hikes in the world probably won't save this sinking ship, and quite honestly, in my opinion, there won't be a huge amount of folks mourning the loss. They did this to themselves.

 

[Ai4i]

Still a fan, we have to admit that many of our very favorite original channels have been deleted both before and at the time of the merger.
When XM had fewer than 50K subs, all of our wireless Emails would be answered in real time.
Ditto on the CSR's.

 

[CTListener]

SiriusXM just has to find a way to reduce in-house costs by cutting more personal and dropping heavy contracts like Stern and the countless other celebrities they pay millions to hire. 20 million subs but I doubt there's 20 million Stern listeners.

There aren't even close to 20 million listeners. Hundreds of thousands of those "subscribers" are actually radios sitting in unsold cars on dealer lots. Slimy Sirius management somehow convinced the SEC that this was a legitimate accounting practice -- wouldn't be surprised if a few envelopes full of bills changed hands under the table, as most political appointees, like politicians, are on the take.

And the celebrities are how Sirius XM maintains its all-important "buzz." Note how it never gets mentioned in the mainstream media at all unless it's signing some exclusive deal with a celebrity or, as in the case of the puke-inducing "Tiger Blood Radio" (Charlie Sheen) and "Client Nine Radio" (Eliot Spitzer), just pasting together other sources' coverage of some celebrity (with no input from the celeb at all) and packaging it on a limited engagement channel.

 

[FRR]

Or just get a lifetime sub as I did and be done with worrying about payments.

That was a big mistake. The lifetime subscription is on the UNIT not the purchaser. I can buy 9 yrs of service at the yearly rate I have as opposed to the 700 plus bucks they want for a lifetime. Whichever, they go to commercial, I'm DONE with them. They barely keep me now with their restricted playlists and less choices

 

[nocomradio]

What I truly cannot fathom about Sirius/XM is this:

How can a corporation who is and has been in dire financial straits continue to operate when almost none of their subscribers or former ones have even a few good words to say about them? Their programming has been gutted, their customer service is poor at best, they keep chopping things up that work and not fixing anything that doesn't and now they want to charge more for the same sloppy service, and wonder why it isn't popular. Even a non-business person should be able to see how this ain't gonna work.

They must be getting subsidized enough to keep afloat, otherwise they'd have gone under long before now. What gives?

 

[livingfruitvirus]

What I truly cannot fathom about Sirius/XM is this:

How can a corporation who is and has been in dire financial straits continue to operate when almost none of their subscribers or former ones have even a few good words to say about them? Their programming has been gutted, their customer service is poor at best, they keep chopping things up that work and not fixing anything that doesn't and now they want to charge more for the same sloppy service, and wonder why it isn't popular. Even a non-business person should be able to see how this ain't gonna work.

They must be getting subsidized enough to keep afloat, otherwise they'd have gone under long before now. What gives?

Actually, the company has been reporting net profits in their latest quarterly reports after years of deficit after deficit. However, that makes the situation even MORE confusing. If the feedback is negative like you said, how is their revenue increasing?

 

[CTListener]

What I truly cannot fathom about Sirius/XM is this:

How can a corporation who is and has been in dire financial straits continue to operate when almost none of their subscribers or former ones have even a few good words to say about them? Their programming has been gutted, their customer service is poor at best, they keep chopping things up that work and not fixing anything that doesn't and now they want to charge more for the same sloppy service, and wonder why it isn't popular. Even a non-business person should be able to see how this ain't gonna work.

They must be getting subsidized enough to keep afloat, otherwise they'd have gone under long before now. What gives?

Actually, the company has been reporting net profits in their latest quarterly reports after years of deficit after deficit. However, that makes the situation even MORE confusing. If the feedback is negative like you said, how is their revenue increasing?

There's obviously a huge "silent majority" of subscribers who like the programming and either like the customer service or, more likely, haven't had to call on it. They are "average subscribers," while people like us, who complain on the internet, are not. Maybe Sirius XM would be a runaway success, looking at 50 million subscribers instead of 25 million as its next goal, if it presented a more customer-friendly face. But apparently it's doing enough in its current listener-ridiculing, celebrity-obsessed, payola-hungry, shading-the-truth-to-regulators style to keep the investors happy and the churn at acceptable levels. Go figure.

 

[landtuna]

A member of one of my other boards published this just this morning. He received it as an email:

If You Subscribed to Sirius, XM, or Sirius XM Radio
You Could Get Benefits From a Class Action Settlement

Para una notificación en Español, llamar 1-800-760-6247 o visitar www.SatelliteRadioSuit.com
Read this message carefully. Records show you subscribed to Sirius XM Radio. We are sending this e-mail to tell you about the proposed Settlement of a class action that may affect your legal rights. Go to www.SatelliteRadioSuit.com for a detailed notice about the proposed Settlement. There is a class action lawsuit against Sirius XM concerning the July 28, 2008 merger that created Sirius XM. The lawsuit claims this merger violated federal antitrust laws and that Sirius XM raised its prices as a result of the merger. Sirius XM denies it did anything wrong.
Who's Included? You are included in the Class if you were a Sirius, XM, or Sirius XM subscriber anytime from July 29, 2008 to July 5, 2011 and you paid: (1) the U.S. Music Royalty Fee; or (2) a monthly multi-radio charge of $8.99; or (3) a $2.99 monthly Internet access charge if you previously did not pay to access Sirius XM's content over the Internet.
What Does the Settlement Provide? Under this proposed Settlement, Sirius XM has agreed it will not raise the price of its base subscription plan and certain other prices through the end of 2011. Additionally, subscribers with long term plans (excluding lifetime subscriptions) will be permitted to restart their plan at current rates before December 31, 2011. After approval of the Settlement, former subscribers will also be permitted to either (a) reconnect their satellite radio without paying a reactivation fee and receive one month of service at no cost; or (b) receive one month of Sirius XM Internet streaming service at no cost. The estimated value of the Settlement is $180 million. The Settlement does not provide for cash payments to the Class.
How to Get Benefits? Current subscribers scheduled to renew before December 31, 2011 do not need to do anything. Current subscribers who are scheduled to renew after December 31, 2011 and who want to restart their long term plan at current rates as well as former subscribers who want to reconnect service or receive streaming service should go to www.siriusxm.com/blessingclassaction.
What Are Your Options? If you do not want to be legally bound by the Settlement, you must exclude yourself from it. The deadline to exclude yourself is July 5, 2011. If you do not exclude yourself, you will release all claims against Sirius XM concerning any conduct arising out of, based on, or relating to the merger that created Sirius XM. If you stay in the Settlement Class, you may object to it by July 11, 2011. The detailed notice, available at the website or by calling the toll-free number, tells you how to exclude yourself or object. The Court will hold a hearing on August 8, 2011, to consider whether to approve the Settlement and a request by Class Counsel for attorneys' fees and costs up to $13 million, plus interest. You may appear at the hearing, but you don't have to. You may also hire your own attorney, at your own expense, to appear or speak for you at the hearing, but you don't have to.
Do not call or write to Judge Baer for information.
For more information about the Settlement: www.SatelliteRadioSuit.com 1-800-760-6247

 

[nocomradio]

I'm not really so sure I want to see Sirius/XM dragged down in a nasty class action lawsuit. I'd simply like to see them provide what XM used to provide. That would be a real win-win situation for everyone. Lawsuits serve no real purpose other than to deter others from wanting to do anything as they simply realize very quickly that someone out there wants to dig into their seemingly deep pockets. Ultimately, it just increases the cost of business in the long run and adds to the disclaimer list at the bottom of each piece of paper you receive form said company. The attorneys profit and everyone else loses out.

To be clear I don't hold any sympathy for the mess that Sirius has created here, but how will a lawsuit do any good? They (Sirius/XM) simply need to do one thing: Listen to the people who pay their bills. I do agree, as posted above, there is probably a silent majority that could care less, but I also feel like those are the people who aren't paying for the service, i.e; those who get it as a deal with a new car, or the like. Anyone actually spending their hard-earned dollars on a service that started out very good, then devolved into its present form, either truly doesn't care, or doesn't listen to the programming and writes a check each month. A check which will have to be bigger for less service.