Sirius-XM Rates Increase Planned for March

After a lengthy merger approval process, Sirius-XM finally merged its channel lineup across both services in November 2008.  This was heralded as the signs of a new satellite radio service that would be beneficial to its subscribers.  However, rumors of the possibility of rate increases had been surfacing amidst these new changes.

As confirmed by its own respective websites, Sirius and XM subscribers can expect an official rate increase beginning on March 11, 2009.  The reason stated by Sirius-XM is that its online audio stream will be upgrading to a 128 KB stream, which its claiming to be "near CD-Quality".  This change will therefore cost subscribers $2.99 additional per month.

Sirius-XM also plans on increasing the regular monthly rate by $2 per month while removing the previously standard free internet streaming.  Marketing spin on the rate increases are being advertised as a "$90 savings" (which is the average savings for two radios on an annual plan) while the company encourages current and new subscribers to lock in their plans now.  According to Sirius-XM, a locked in plan prior to March 11 will guarantee you the current rate and "grandfather" the free internet streaming bonus. 

Current rates range from $7.99 for online only listening to $16.99 for the combined channels from both services.  We contacted customer service for XM Canada for clarification as the Canadian services did not merge with Sirius.  XM Canada said that there were currently no rate increases planned nor if there is any indication the increased online streaming quality applies to Canadian accounts.  There is also no subscription plan offered that includes the channels from both Sirius and XM as is the case in the U.S.; however, the channel lineup changes are still applicable.

This news comes shortly after the announcement of a new "all-in-one" radio that can receive signals from both service's satellites.  Sirius-XM is the only provider of commercial satellite radio in the U.S. and had traded $30.5 million of debt for 67 million common shares in 2008.  Reduced earnings and subscription numbers were blamed on the 27% drop in new vehicle sales in the U.S. last year.  Sirius-XM has $995 million in debt that will be due for repayment in 2009; its currently in talks with its debtors on repayment terms.

  • captaincharisma
    you would think Sirius-XM is trying to fail then trying to survive. first the channel's merging and the subscribers disgust over that making many long time subs cancel there subscription now they are raising prices. all i know Canadian subscribers are still getting screwed out of programming options
  • Funny that. Companies merge. Monopoly. Price hike. Me, still not buying. I'll stick to my static free radio thank you.
  • Tekkamanraiden
    I'm curious how much longer they're gonna be around.
  • AndrewMD
    I guess if you can't live without CableTV, you have to have Cable"Radio"....

  • If they are reading this, I will be cancelling my membership that I have had with them for almost 6 years after my contract expires in March. I have never gotten a notice that this would be happening, and I am really ticked off. I use the service at work to listen to music daily, and taking that away and increasing my monthy rate is really stupid.

    I home their stock goes even lower....I don't that's possible given that its almost worthless to begin with, but you can always hope.

    Hope you enjoyed my money while it lastest, because that's the last you'll see of it.
  • Darkk
    What's wrong with MP3s over digital radio? Seems they screwed this up royally by not listening to the customers of what they want and now raising the rates. Guess it's a matter of time before the giant falls over....
  • viewwin
    I called last Monday to cancel my service. They would not let me cancel, and I gave in to getting the next 3 months free. I plan on calling back when the bill is due to cancel again. I rather not pay for radio or just burn my own music with no commercial interruption, stupid emtabs commercials.
  • nekatreven
    MenotyouFunny that. Companies merge. Monopoly. Price hike. Me, still not buying. I'll stick to my static free radio thank you.
    Generally speaking I'd have to agree with you. I will say though that considering the times, I think part of the rate hike is related to them just staying solvent; and not as much a greedy grab at more profit due to no competition. At this point their biggest threat is themselves!

    They may have a monopoly, but its not a "lets swim in our pool full of money" type of monopoly (like MS). The whole 'putting things in space' part of their business is real damn expensive. They have billions in debt and seem to be just trying to stay afloat, their stock is worth almost nothing, etc.

    I'm sure they have plenty of fault for all of their problems, and it may be better for them to just go under (probably would be). Regardless though, I think this one is an attempt at just surviving more than it is greed.
  • TwoDigital
    Nearly $1 billion in debt means they are not charging for their service what it really costs for them to provide it. Since customers aren't willing to pay a higher price, I'd assume they don't value the system for what it costs to provide.

    This is a perfect example of the market WORKING. Sirius needs to change something to get back in the black or they will go out of business. Customers have spoken. (Please PLEASE don't let these guys get in line for a 'bailout'...)
  • TwoDigital
    Are these satellites just in geo-sync over the United States or are they truly a global company? They may want to consider broadcasting a few hundred channels in Chinese or various forms of Hindi to try and capture a few billion more potential customers.