Chasing satellites
Sirius XM Radio () didnt just survive last years 12% rate increase. The satellite radio provider thrived, closing out 2012 with 2 million more subscribers than it had when the year began,satellite tv providers Satellite TV. despite bumping its basic monthly rate to $14.49 in January.
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The rub for Sirius XM is that unlike cable and satellite television providers that ce escalating rates from networks and broadcasters, Sirius XMs costs are actually heading lower. Programming and content costs have declined 1% over the past year, even though its subscriber base has expanded by 9%.
I think the music industry will be the losers in the long run as SIRI does have a talk only subscription, as ICan Sirius XM Survive Another Price Hike_ satellite radio, had it before the all-everything plan. I can easily go back to it. They get to greedy and theyll lose listeners to FM.
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The timing isnt ideal. Most Sirius XM subscribers probably cracked open their first paychecks of 2013 earlier this month to find that their take-hsatellite radioome pay is noticeably lower after the end of the payroll tax break that concluded in 2012. Budget-minded milies will need to assess what theyre willing to do without, and satellite radio may be a casualty.
Can Sirius XM Survive Another Price Hike_ satellite radio Company fundamental data provided by Morningstar. Earnings Estimates, tumour4407.typepad.com Analyst Ratings and Key Statistics provided by Zacks.
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My wife likes the music, but said she could easily go back to her FM stations, if I went back to talk,news and sports/comedy.
The music royalty fee in addition to the $14.49 monthly fee isnt new. Sirius XM began to pass on the royalties that it pays out to composers, publishers, artists, and record labels in 2009.
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Subscribers didnt flinch then, and its easy to argue that they wont flinch now. Media consumers are so used to seeing their cable bills creep higher every so often that they dont often realize how much more they are paying for entertainment than they were a few years ago.
This doesnt mean that Sirius XM is ripping off its customers. Just as Pandora has been lobbying to ease the burden of rising copyright royalties -- that terrestrial radio stations dont pay -- Sirius XM is also forced to pay a larger chunk of its revenue to the music makers with every passing year.
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Also, i think SIRI should offer talk, plus premium talk NFL/MLB channels w/o music-theyd get the sports n who doesnt like paying the royalty.
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These are certainly interesting times for satellite radio. Liberty Media () finally took majority control of Sirius XM last week, and shuffled up the board over the weekend, with three resigning board members replaced by Liberty Media insiders. Liberty now owns 50.5% of Sirius.
Despite Sirius XM being one of the markets biggest winners since bottoming out three years ago, there is still some healthy upside to be had if things go right for it -- and plenty of room for it to ll if things dont. Read all about Sirius in our brand-new premium report. To get started, just click here now.
Now well see how things play out on a much smaller scale.
To each their own. I subscribe and love XMSIRI because i had enough of commercials and talk radio. Thats just me.
However, its hard to bet against Sirius XM here. It ced a much steeper challenge with last Januarys 12% rate hike, and it went from forecasting just 1.3 million net additions last year to tacking on 2 million net subscribers.
Still, the show must go on. The challenge here is if subscribers will be open to paying more for said show.
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Sirius XM is advising its 23.9 million subscribers that it will be bumping its music royalty fee higher on Feb. 1. Starting with next months billing cycle, aduedu2628.typepad.com tumour4938.typepad.com accounts will see their monthly royalty charges go from $1.42 to $1.81 on the most popular Select and Premier pricing plans. The rate for additional receivers under the same account will also go up by a little more than 27% to $1.25 a month.
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