XM / Sirius to offer new pricing schemes after merger

We already know just how "priceless" the XM / Sirius merger will be, that your current radio will probably still function just fine, and that both firms are still facing legal heat in one way or another, but we hadn't heard just how the newlyweds would handle the pricing of the new service -- until now. In a decision sure to make a few people elated while giving a hint of suspicion to most others, the merged company will offer customers a package that includes "less channels" at a monthly price lower than $12.95, one that seems "substantially similar" for exactly $12.95, and finally, a third option that touts even more channels for "a modest premium." We can only assume that the pricey third alternative will boast a nice mixture of both companies' existing lineups, but unfortunately, it also leaves open the possibility that the cheaper two options might exemplify the "you only get what you pay for" tagline.

[Thanks, Frankenstein B.]

[Jamie @ Mar 22nd 2007 7:38AM]

Tsk, tsk, I wonder what gave it away that you listen to Howard, the anger or the language.

[Jason @ Mar 21st 2007 11:34PM]

I can't wait to subscribe to the "John Ashcroft is a Whore" channel on Xirius!

[Tim L @ Mar 21st 2007 11:49PM]

Just what I was afraid of, the merger means less channels for the same price, not more. If this goes through I'll be hooking up my Zune to my car stereo and ditching XM-Sirius or whatever they call it. I just can't justify paying any more for radio when I already have a great portable media player.

What a shame.

[Falken @ Mar 22nd 2007 12:22AM]

If the price goes up or they cut ANY channels, I'll go out and buy an IPOD. If they find a need to offer less and charge more, I can't see this business model working for them. I can only speak for XM, but does anyone else notice the commercials on the talk stations sound like someone is reading off a spam inbox?
Good Luck!

[anonymouspimp @ Mar 22nd 2007 10:52AM]

Look, I really like my Sirius S50... but if things go down the way I think they will (content quality slips, prices increase, etc), I might as well subscribe and get the Zune-pass (or whatever it is called) and put my Zune in my car. Same price per month and I can listen to whatever I want, whenever I want.

Just say no to this merger.

[Dave @ Mar 22nd 2007 7:21PM]

What's wrong ... you're not into that douche Jim Blasingame?

[Evan @ Mar 22nd 2007 12:37AM]

FCC Chair Kevin Martin has been pushing for a-la-carte cable and "family-friendly" programming. I think that if XM and Sirius want to get FCC approval for this deal, offering several choices (including a basic plan WITHOUT HOWARD STERN) is a good way to go. People pick what they want and our nation's youth does not get corrupted by howard stern or whatever... odds of approval just went up

[Joe @ Mar 22nd 2007 1:13AM]

XM tried that with Opie & Anthony & the Playboy Channel - it does not work. O&A had to start from the ground up after being in radio limbo for 2 years. Once they were freed from the premium channel, they were able to successfully build a new audience that grew very rapidly nationwide. Now the number one channel on XM is Opie and Anthony's 202, while Sirius' biggest channel is Howard's channel (and remember that when Howard was on terrestrial radio, he was not available throughout the whole country and Canada, so he can still grow his satellite audience as well). They would be fools to offer their biggest names at a premium, because it will drive away the casual fans and the hardcore listeners will make business for the company a living hell as they would be attacking in unison - imagine Howard & O&A fans fighting on the same side. It would be brutal to say the least. I would hope the premium content would be the contract stuff they don't directly own, such as NASCAR and the NFL.

[chris @ Mar 22nd 2007 1:00AM]

Just a question: if you buy Sirius' lifetime plan, will that continue with the merger or will they stop that and make you pay monthly? Also, if you were to purchase, say, 5 years of XM service, what pricing plan will you be in after the merger? I would guess the middle one, but if that doesn't include MLB, which is a major reason I went with XM, I will be quite upset.

Anyone have any insight on these situations?

[John Doe @ Mar 22nd 2007 1:26AM]

$13 bucks says that it runs down like this....

first 2 years prices stay the same as the gov continues to eye them. After that a price hike of a couple bucks because of "operating expenses". Then every few years a couple bucks hike for "new content" that comes down to shit most people couldn't give less of a shit about. Don't like it? Go with that other sat service....oh wait.

[jnik @ Mar 22nd 2007 2:21AM]

Sounds like cable - We'll end up either doing that or going to a "tier" service; Having to buy all the channels just to get the ones I want!

[K_G @ Mar 22nd 2007 3:06AM]

Why do they have to merge at all to do this? I had XM and I ended dropping after a few months because I couldn't justify the cost for when I was listening to just 2 or 3 channels on a regular basis, and both are already free on my Direct TV feed. If they paid the big bucks for various content like MLB and NFL, just make those people pay for it instead of sticking to everyone. I personally know 2 people who would sign up if they could get one channel (the BBC) for say, $35 a year (yeah, I know its streams online but these folks aren't the most computer proficient). It wouldn't take a ton of people like that to solve a good number of XM and SIrius's cash problems.

[GhostDoggy @ Mar 22nd 2007 5:56AM]

From the WP "Winning approval for a proposed merger of the nation's two satellite radio companies turns on whether regulators buy their argument that iPods, Internet radio and other new technologies have expanded so dramatically that a monopoly would not harm consumers' choices or purses."

This is nonsense. The satellite television providers tried to argue that the cable industry was their competition, but the FCC concluded it wasn't the same technology market and couldn't be considered competition. As such, Dish Networks and DirecTV were not allowed to merge.

Also, the music industry has done everything under the sun and has most successful to kill Internet Radio by making the royalty structure way too expensive even for the analog ground radio stations to offer robust Internet radio.

Sorry, while the spin doctors at XM and Sirius would like to paint a nice picture for consumers and investors I would have to agree with an FCC decision to not allow the merger based on their previous position for disallow Dish Networks and DirecTV to merge. If XM and Sirius merge there would be 'no satellite radio competition'.

[LC @ Mar 22nd 2007 8:11AM]

Tim L said:

"Just what I was afraid of, the merger means less channels
for the same price"It didn't say that. It said LESS channels for
LESS than the current $12.95. SUBSTANTIALLY similar programming for
the same $12.95 price, meaning that the bulk of the programming is
probably the same, with extras, most likely sports packages, similar
to what is being paid for now.

[LC @ Mar 22nd 2007 8:19AM]

Ghostdoggy-

As you may know, one case does not set precedent when you are dealing with the FCC. They decide these things arbitrarily. They could just as well approve the merger. What Direct TV and Dish Network probably failed to do was prove that their business would fail without the merger. Satellite radio has been operating in the red for years.

If the merger does not happen, eventually one of these providers will fail first and we will have a monopoly by default and a raise in price would be inevitable, followed by the remaining company eventually failing. Then we would be left with the Broadcast radio monopoly. Yeah, the consumer will really benefit from that.

[socko @ Mar 22nd 2007 10:50AM]

This merger sucks, the consumer will get screwed in the long run. $12.95 for fewer channels is far from a deal, maybe I will slit my wrists, go back to clear Channel and an ipod.

[Justin Turner @ Mar 22nd 2007 11:16AM]

I don't understand how people like LC can come out in seeming favor of this when so many other excellent points are being raised.

I understand that the programming will be "Substantially similar" but substantially similar to what first of all? XM's lineup? Siruis's? As an XM subscriber, I'll be upset if my favorite stations aren't considered "similar" enough. Also, substantially similar allows enough leeway to include "less than what you are presently receiving". How much less is unknown, but they are not currently promising $13 a month won't pay for what you're receiving now.

Also, XM just raised their rates 2 years ago 30%. A raise of $2 in a couple of years (which I think a lot of us see coming if this goes through) would mean a 50% price increase in only a matter of a few years. The programming content has improved, but they're pushing the envelope here.

By the way, Internet radio doesn't really qualify as competition in my mind because EVERY XM or Sirius owner I know listens to Sat. radio almost exclusively in their car.

I think the main point is, people are scared that $13 will no longer get them the channels that are important to them. I listen to music, news, and traffic. Some of the posters here want baseball. Others Howard. Regardless, if music is $13, but I have to pay extra for news and/or traffic, I'll be upset and I'll be forced to consider terminating my agreement.

To chris:
I believe if this merger goes through you'll have the option of continuing your contract terms, but I believe they'll have to allow you the option of getting out since it will be with a different company. XM certainly would since Sirius would become the parent company. Similar to what Verizon had to do when they changed their text messaging rates a couple of months ago.

[andrew @ Mar 22nd 2007 11:38AM]

A LA CARTE!!! There is no other way this (satellite radio) will go anywhere. Most people have a few specific channels they are looking for and all of the rest they could care less about. A la carte is the only way to broaden the customer base and thus to increase ad revenue.
If they don't go a la carte, expect podcasting to take off (again), and internet radio to become the next big "thing" for automakers.

[LC @ Mar 22nd 2007 11:52AM]

"I don't understand how people like LC can come out in seeming favor of this when so many other excellent points are being raised."

A lot of excellent arguments supporting the merger have been made the past two days in other merger articles here.

I'll recap it and show you why Justin.

First, people need to really reread the article in this post. Nowhere did it say you were getting less that you are getting now at the current $12.95.

Both XM and Sirius have contracts with the same companies, meaning that both have CNN Fox NPR, Air America, etc so yes they are similar as in they are the same exact programs. They also have decade channels as well as music format programs. These will be merged as well.

You talk about XM raising their prices two years ago. You ever wonder why they did that? They did it because not only were they competing with broadcast radio, but they were also competing for subscribers from Sirius.


If this merger does not happen, both companies will eventually be forced to cut costs by canceling programs more commercials on traditionally commercial free stations, raise prices, or all three. Instead of people being scared that $13 won't get them the channels important to them, $16 or $20 won't if things remain status quo. They are bleeding money with no turnaround in site. Combining assets will strengthen the companies and allow them to grow without raising the price. Hell, people have the opportunity to pay less if this merger happens. I still can't believe people are opposing this.

[K_G @ Mar 22nd 2007 10:53PM]

"You talk about XM raising their prices two years ago. You ever wonder why they did that? They did it because not only were they competing with broadcast radio, but they were also competing for subscribers from Sirius."

Raising prices is generally not a great way to grow a market, esp if your "competition" is widely available for free with no additional hardware expense as in the case of broadcast radio. Also XM was $3.00 (9.95 vs Sirius 12.95 open monthly fee) cheaper than Sirius but then XM decided, hey, why compete so hard?...I'll just move my price to be exactly the same as my competitor. Sure, they added a few channels or some crap like that, but nothing to justify jacking up rates 30%.

These clowns are in trouble because they spent too much for too much content that a large portion of the population will not pay for, or at least, not pay $13 a month for. The sooner one of these guys goes out of business, the sooner someone will just come along and buy up the hardware assets cheap and void all those expensive content contracts (have any of you actually done a back of the envelope calculation on what Howard Stern costs every Sirius subscriber a month?) and actually run one of these companies as a proper business. If Iridium could be brought back from the dead, either a defunt XM or Sirius could be easily reivived sans alot of expensive baggage.

[LC @ Mar 23rd 2007 5:42AM]

"Raising prices is generally not a great way to grow a market, esp if your "competition" is widely available for free with no additional hardware expense as in the case of broadcast radio."

Yet cable television managed to do so from the days it was a struggling newcomer all the way up to today. They were hurting at the beginning and had to raise prices to make up losses. The opportunity here is if the merger is allowed, the government can have the new company sign to X number of years of rate freezes. Something that they did not have the hindsight to do with cable.

[Trent @ Mar 22nd 2007 1:36PM]

All I care is that the Sirius channels stay commercial free. But if commercials start popping up because of the merger.

Cancelled.

[Tony @ Mar 22nd 2007 6:01PM]

OMFG!!! Why are so many of you such CRYBABIES!!!! If Ferrari and Lamborghini merged and used that power to make an insane supercar for a "Modest premium" you'd be all over it so crawl back into your holes and quit being so damn whiney.

[bob @ Mar 22nd 2007 6:22PM]

Well Sirius + XM is defintely pretty cool, however, there is a new hot thing out there. How about listening to Sirius chanels directly stremed over Wifi? If you want to kind you, check out http://www.quickandeasywifi.com for more information. Have a great day.

[Vic Healey @ Mar 23rd 2007 7:30PM]

My wife handles the bills for me and she just mentioned that XM just lowered our rate to $7 a month from about $13. She just cut them a check for the whole year. We have had XM for several years and I own half dozen XM receivers but we have only one with a very large easy to read display currently activated.

We really do not need XM any more and probably would have dropped it if they hadn’t cut us that new rate. Satellite radio already faces severe problems in our family and I suspect we are typical of most others. We used to have three radios activated with XM for several years and it cost a chunk of money to carry them but we have cut back with the increased expense of three dollar gas.

I could care less about most XM channels except the news, traffic, and weather. I listen to an iPod more than XM while mobile; but I like the scrolling traffic alerts in Atlanta area and keep XM going visually monitoring it. I have just discovered from our local NPR stations Morning Edition that by buying a new type Digital radio I can get a slew of channels including 24 hour news at no additional cost here in Atlanta Georgia.

My wife listens to XM for Old Time radio and Sonic Theater.

I demonstrated to my wife that she can get her OT and mystery radio fix by using internet radio streams and the easy to use ITunes interface. She can do this mobile in some areas using WiFi for the net connection. I am surprised at how many spots give us a signal in shopping centers and in a restaurant districts.

The only advantage XM has is that XM gives a solid signal far from the towns where free WiFi and local stations don’t adequately reach.

[Jim @ Mar 23rd 2007 10:39PM]

When are they going to offer a free service (ie 3-5 commerial filled channels for fee) with the option to upgrade or buy special events (IE PAY-PRE-LISTEN type of programing)?

[GhostDoggy @ Mar 24th 2007 8:26AM]

From the WP "Winning approval for a proposed merger of the nation's two satellite radio companies turns on whether regulators buy their argument that iPods, Internet radio and other new technologies have expanded so dramatically that a monopoly would not harm consumers' choices or purses."

This is nonsense. The satellite television providers tried to argue that the cable industry was their competition, but the FCC concluded it wasn't the same technology market and couldn't be considered competition. As such, Dish Networks and DirecTV were not allowed to merge.

Also, the music industry has done everything under the sun and has most successful to kill Internet Radio by making the royalty structure way too expensive even for the analog ground radio stations to offer robust Internet radio.

Sorry, while the spin doctors at XM and Sirius would like to paint a nice picture for consumers and investors I would have to agree with an FCC decision to not allow the merger based on their previous position for disallow Dish Networks and DirecTV to merge. If XM and Sirius merge there would be 'no satellite radio competition'.