XM and Sirius planning less expensive a la carte packages
We had an idea that the XM/Sirius merger wasn't exactly going to be a win for the customer, and now we hear that XM and Sirius will be offering tiered pricing with plans that are both lower and higher-priced than their current $12.95/month service. Certain "a-la carte" plans will actually come in at a price below existing rates, which should fit the needs of a select few subscribers. There will still be a $12.95 package, with what Sirius described in a federal finding as "substantially similar" offerings to what customers are getting now for the same price. The soon-to-be merged companies will try to build additional revenue with upper-tier packages that will give customers more than what they're getting now, for less than the cost of getting both services.
Senator Herb Kohl (D-WI), chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, said that the merger could be a "real bad deal" for customers, and with this news, we tend to agree. When the two companies were fighting each other for subscription dollars, they gave us everything they could afford and some things they probably couldn't. If the merger is approved (and how often are they not) the combined company will slice and dice service cable tv-style, and customers will be left to either compromise what they really want in the name of price, or simply pay more for everything. Monopoly is more fun when it's the board game. We're not exactly political activists, but if you think this sounds like a bum deal, you can always send Senator Kohl a note.
[Source: Reuters]
Reader Comments (Page 1 of 1)
Joe 10:28AM (3/22/2007)
Or we could opt for what everybody who DOESN'T BUY XM/SIRIUS already does, get our entertainment from CDs and traditional radio... When Clearchannel and other Traditional Radio sources are screaming bloody murder about the merger when they are a free service you know it will be better for consumers (sometimes maybe in just the value proposition, even if price goes up) Clearchannel is worried about ad revenue, which is generated by listener share, that means they foresee this as a viable competitor now with the merger. It's still a luxury item, they can charge as much or as little for it, but if they charge lower more subscribers, more add revenue, better for them....
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Jeff 10:43AM (3/22/2007)
I subscribe to XM but really only listen to a handfull of stations. If I could pick the stations I wanted, that would be great. If I had to buy groups of channels in packages, (i.e. country package, jazz package, rock package, news package, etc) which is how this is likely to end up, it would cost more than the current subscription and I would drop them faster than a hot coal.
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DJ 10:43AM (3/22/2007)
Omigod....Herb Kohl is actually doing something in the Senate????? And it only took him 19 years to come up with this.......Wow, I guess I should have voted for him.
Gee, maybe he'll offer even more automotive legislation in the future, like requiring cars to have door handles, or headlights or black tires or......
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Atomicbri 11:06AM (3/22/2007)
What amazes me is we live in a country that has laws against monopolies, however more and more companies get approved for the monopolistic moves....why is that? Look at cable...if it wasn't for the dish services, we would be paying probably $200 a month for service. My firend has XM and she too listens only to a handful of stations, and my next car I was making sure to have one or the other (XM Or Sirius)however I am not going to pay MORE than what they offer now for less, I will listen to commercials thanks...
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Mike 11:26AM (3/22/2007)
This article might have been posted by the NAB. There is no way a merger eliminates competition. In fact, a merger would give us more competition for the crap on the radio plus they would be able to use the total spectrum originally licensed to them and start streaming video. Now we'll have another competitor for cable companies. Usually this blog posts non biased articles that usually just gives information on and auto product. This is a shamefull shill for Clear channel
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weiss1929 11:30AM (3/22/2007)
I would like to see two things in this merger if approved:
1. XM as well as Sirius should send on both frequencies each to eliminate many blind spots next to mountains or structures. Servive from 2 satelites in different positions will propably do this.
2. I like to see offers or packages for 5,10 or 15 stations OF MY CHOICE at lower cost and/or all the stations at $ 12.50.
I only listen to perhaps 5 stations on XM and yes there should be no extra charge for the home if the car is equipped with satelite radio.
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Dub 12:19PM (3/22/2007)
I'm with most of the other commentors -- we've got Sirius in our Ram (came with the truck), but had XM prior to that. There's only a handful of stations that I listen to (maybe a dozen if you count the stations I listen to plus the ones my wife does), so paying less for a select set of channels sounds good to me, as long as I got to pick the specific channels. None of the 'genre' bundle crap.
And if they merge all the programming, and the price for everything goes up a bit, that seems reasonable to me, as long as it's still cheaper than it would have been to have a sub to both services separately.
I also like the idea of a single subscription covering multiple devices, say 3 (2 cars plus home), and any devices beyond that are at the current ~$6/month add-on fee. Cell phones and cable/sat services already do something like this, like a 'family package' or something.
They'd have to set a limit on the number of devices, otherwise what's to stop someone from getting 20 receivers under one subscription, then splitting them up btwn friends/family and then everyone is chipping in like a buck a month for service...
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NFL & MLB fan 12:45PM (3/22/2007)
The end to the frustrating exclusivity arrangements under which those of us who follow multiple sports have to pay for multiple satellite radio providers, will be a good deal for many of us customers. Maybe not for everyone, but it's not a "bad deal" for me, as Sen. Kohl would have it.
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BCM 1:12PM (3/22/2007)
It would be a bad deal if both money-losing services went out of business and left their hardware manufacturers and people who purchased hardware high and dry along with the stockholders. Any entity which bought either's assets out of bankruptcy would raise prices to economically viable levels. True, the tipping point would change because the capital-intensive part of the business would already be amortized, but running a loss to gain subscribers is no longer an option.
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Gary 2:08PM (3/22/2007)
I would guess the Clear Channels of the world are contributing heavily to Senator Kohl's bank account. How does having two bankrupt satellite companies benefit the consumer? If the consumer can't pay the new tab, the company will adjust. I'm willing to pay to not have commercials.
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Liquidfire3240 2:17PM (3/22/2007)
so the only people this benefits are the ones that already pay for both services? Ok, anybody that reads this comment, respond if you actually pay for both services.
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TheMac 2:44PM (3/22/2007)
Oh the bills.. it's too expensive... I bought Sirius a year and half ago, and the 13 bucks a month it costs for the survice more than makes up for the fact I never buy CDs now.. I went from buying 3-4 a month, to 1 every couple of months. Would I pay more than $13 for it? No, probably not.. but for the 10 or so channels I listen to all the time it is more than worth it.
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iQuack 5:56PM (3/22/2007)
I drive few miles per year but still subscribe to XM because I was hooked on it after the 3 month trial in my then-new '04 Honda Accord EX-L.
Shortly after buying the car I took a 500 mile (each way) trip and the XM radio was fantastic. The same channel followed me from San Francisco to Palm Springs with no static, annoying ads, nor too many repeated selections on that channel.
I was driving alone and the XM radio was ideal for highway driving and devoting full attention to the road, not trying to find strong radio stations on Route 5 in the middle of nowhere.
Just renewed for a second 3 year term which lowers the cost to $10 monthly. Makes no sense to pay by the month if you plan to continue the service which can be canceled for a refund.
I rarely listen to more than one channel, but it's great to have no commercials along with CD-quality sound and no fumbling with CDs or having to buy from iTunes or anywhere else.
Also, XM members can listen over the internet at no extra charge. As I write this, XM is playing from my computer's speakers while logged in via a different browser (same browser works in new window, but separate browser is less likely to be disconnected in error). Sounds great through iMac speakers, too.
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iQuack 5:58PM (3/22/2007)
I drive few miles per year but still subscribe to XM because I was hooked on it after the 3 month trial in my then-new '04 Honda Accord EX-L.
Shortly after buying the car I took a 500 mile (each way) trip and the XM radio was fantastic. The same channel followed me from San Francisco to Palm Springs with no static, annoying ads, nor too many repeated selections on that channel.
I was driving alone and the XM radio was ideal for highway driving and devoting full attention to the road, not trying to find strong radio stations on Route 5 in the middle of nowhere.
Just renewed for a second 3 year term which lowers the cost to $10 monthly. Makes no sense to pay by the month if you plan to continue the service which can be canceled for a refund.
I rarely listen to more than one channel, but it's great to have no commercials along with CD-quality sound and no fumbling with CDs or having to buy from iTunes or anywhere else.
Also, XM members can listen over the internet at no extra charge. As I write this, XM is playing from my computer's speakers while logged in via a different browser (same browser works in new window, but separate browser is less likely to be disconnected in error). Sounds great through iMac speakers, too.
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iQuack 5:59PM (3/22/2007)
OOPS, sorry for the double post above.
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YeeDiddy 10:12PM (3/22/2007)
the logic behind the "monopoly reasoning" is completely false. Firstly, the are no barriers preventing an entity from launching their own satellites and competing against XM / Sirius. Secondly, satellite radio is just another form of audio entertainment that is actively competing against a medium that is ubiquitous and FREE.
Let the market determine whether or not they would choose to pay $13 or more per month for satellite programming - this should not be a decision made by the government.
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blunckhouse 9:54AM (3/23/2007)
I had a 3-month free trial to Sirius when I bought my VW. I enjoyed it, but I only listened to five stations. When the trial was up, I debated whether or not I would subscribe, thinking I could pay month-to-month. When I found out I had to pre-pay for at least 6 months at a time, I bought an iPod adaptor instead.
I'd subscribe to satellite radio if I could pick which channels I wanted, instead of paying for more than I'll ever listen to, and could pay on a monthly basis, like my cell phone or TiVo. I'd even sign a contract if it meant smaller bills.
Also, I want one subscription that will cover all my devices, too. One subscription per device is ridiculous. I know I could get a portable device for the car that also connects to my stereo at home, but why would I pay for another tuner when there's already one that came with my car? I don't want to have to move it every time I get home or to the office, I'll buy separate tuners for home & office if one monthly subscription covers all three.
For me, the content was already great on Sirius, but the service details need to be worked out.
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Patrick 11:01AM (6/05/2007)
I work with NAB and I know I didn't post this. I will say that tiered pricing should always be a red flag to consumers. Good to see the list of those that feel the merger is a bad deal for consumers is growing. Rep. Mike Doyle has expressed his concern with the proposed merger.
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