Sirius Buzz is reporting that merged satellite-radio monopolist Sirius XM is planning a price hike in March for…its best customers. The cost of getting satellite radio on additional devices beyond the first one you own go will apparently go up by $2 a month; in addition, the streaming Internet service that’s now free will cost $2.99 a month.
When the FCC approved Sirius and XM’s merger last year, it was famously based in part on promises of a three-year price freeze for service. That guarantee apparently applied only to the basic $12.95 a month charge, leaving Sirius XM able to jack up other prices associated with its service. With no direct competitor, there’s less pressure to keep prices low for fear the other guy will undercut them.
Well, maybe. Satellite radio is in dire danger of being rendered irrelevant over the next few years by cell phones that stream a bevy of music, news, and talk stations for no cost beyond standard monthly data fees. Already, my iPhone gets Pandora, Last.FM, Slacker, AOL Radio, NPR, and a whole lot more. The company’s betting that locking up exclusive rights to stuff like Howard Stern and major-league sports will keep its services attractive, but that sounds like an expensive proposition for everybody involved.
News about price changes comes a few months after Sirius XM sprung channel changes on its customers without warning, driving some of its most faithful customers bonkers. (Take a look at the comments on the story Ed Oswald wrote at the time.) I’m still getting used to the combined company’s substitution of something called SIRIUSly Sinatra for the old High Standards station I enjoyed, and really, it’s the prospect of the Red Sox in the spring more than anything else that’s keeping me from defecting to the Internet. And the company’s apparent intention to continue with two separate brands with similar-but-not-identical channel lineups is incredibly kludgy; it leaves DJs having to give two channel numbers each time their identify the station they’re on.
I was hooked on XM for years, and would love to see satellite remain a viable, appealing broadcasting option. But Sirius XM is in a tight spot, and while raising rates may help whip its shaky balance sheet into shape, you’ve gotta think that it’ll prompt some longtime customers–especially those who own iPhones–to dump it.