Breaking News: XM to raise rates but include extras for subscribers (1 Viewer)

[Ronald Epstein]

XM Satellite Radio Expands Basic Service and Announces Price Changes Effective April 2; XM Offers Existing Subscribers Unique Opportunity to Lock in Current Rate for Up to Five Years

Monday February 28, 10:12 am ET


WASHINGTON, Feb. 28 /PRNewswire-FirstCall/ -- XM Satellite Radio, the nation's leading provider of satellite radio with more than 3.2 million subscribers, today announced that it is expanding its basic service package, and that the monthly subscription price for XM's basic service will increase to $12.95 beginning April 2, 2005. XM is also offering existing customers the unique opportunity to lock in the current $9.99 monthly rate with a one-year prepaid plan and deeper discounts with a two, three, four, or five-year prepaid plan until April 2.

The price change will not affect XM's Family Plan, which allows XM subscribers to add up to four additional subscriptions for $6.99 a month per radio. Beginning April 2, XM's expanded basic service will include the Internet service XM Radio Online, which offers more than 70 channels of XM music and talk programming (previously $3.99 per month), and the High Voltage channel, featuring the talk radio duo Opie & Anthony (previously $1.99 per month).

Since the national launch of XM Radio in November 2001, XM has dramatically expanded its channel lineup from 100 channels to 151 channels. XM has converted all of its music channels to a commercial-free format and invested heavily to add 21 traffic & weather channels, 16 channels dedicated to Major League Baseball, nine college sports channels, and XM Public Radio, featuring legendary journalist Bob Edwards, among other channel additions. This is the only price change since XM's 2001 launch.

Hugh Panero, XM President & CEO, said, "XM's growth to date demonstrates that the potential for satellite radio is far greater than anyone anticipated. This new pricing approach will help fund future technology development, enable us to offer more attractively-priced radios and maintain our programming excellence. Together, these initiatives should result in XM exceeding its current target of 20 million customers by 2010. Most importantly, XM is instituting the pricing change in a way that adds value to the basic service and provides existing customers the opportunity to lock in the current lower monthly rate -- a unique opportunity rarely offered by subscription entertainment services, including satellite radio, satellite television and cable television."

 

[Bob_L]

A 33% increase is too much. I think they're going to lose me even though I just acquired a new SkyFi2. This baloney about adding services doesn't affect me at all. A bunch of traffic news for cities I don't live in is not value-added.

Opie and Anthony -- just more braindead vulgarity passing as contemporary humor.

Internet radio? I have my SkyFi in my office so I don't clog my bandwidth with non-business-related streaming audio.

Plus, I couldn't care less about their sports programming.

At $10/month I could put up with the flawed sound "quality" because of the quality of the programming. At $13 a month, the extreme compression seem a little more compressed, the digital artifacts a bit more obvious.

Is an additional $3 a lot of money? Not really. But it's all about perceived value. To me, XM is a $10 bill value.

 

[Ronald Epstein]

Bob,

I understand and respect your position.

Under your circumstances I would only
value XM as a $10 service.

For me, I'm not happy that the rate is
going up by $3 but since I am already
paying $2 more for Opie and Anthony and
have always wanted XM Online streamed this
works out VERY well.

XM may be going up to the same price as
SIRIUS, but that service stated they too
would raise their rates at some point.

 

[Jed M]

Besides getting overly compressed online streams, I don't really see the value either. I could care less about "shock jocks" and hasn't the weather and sports always been free?

 

[Michael Ballack]

I'm a big Opie and Anthony fan, while they are not for everybody, it's good that xm made them available to all 3.1 plus million subscribers. It will be interesting to see how or if their show will change now that it's not premium and what kind of ratings they'll get when they go against Howard.

 

[BrianAe]

Will XM still offer an internet only plan? I've been thinking about trying it out for a while through that.

 

[Joe McCabe]

I'm in Ron's camp on this.

I already pay for O&A, so the price difference isn't that much of a problem, and the online service makes up for the extra .97 cents.

And as far as people leaving XM because of this.....the only other place to go is Sirius, and they're the same price now, plus, their (already announced) price hike looms on the horizon.

So overall, this news is not really that surprising, and at the end of the day, more or less irrelevant (to me).

 

[TheLongshot]

To be honest, it isn't surprising to me.

It kinda tells me that having O&A as a premium program was a failure. It wouldn't surprise me much, since O&A isn't exactly a household name.

Then again, Sirius now doesn't have the argument that they have internet streaming at no extra cost.

Also note, that some channels are ONLY available online now. (XM Liquid Metal, Special X, etc.)

This will work out for the best for me, since now I can stream XM at work. (I'm not next to a window, so getting it OTA isn't going to work for me.)

Jason

 

[WillG]

Count me in as someone who listens to O&A and someone who can only listen at work through the internet stream, so this will work out good for me. I'm sick of having to open a new e.mail account every three days for the streaming service. :b

Just of note, I read something on another board that suggested that even though O&A's High Voltage will be included in the basic subscription, you will still have to specifically request that channel be activated on your XM Unit. I'm not 100% sure on that though, but it would make sense since XM still obviously has jitters about having them on their service.


Opie does often claim that they have far exceeded XM's expectations for High Voltage subs. But since they apparently are not allowed to reveal the actual numbers, it's hard to say what that really means. But yes, they are only going to be so successful on that premium channel and if what I have suggested above is true, XM is going to have start supporting them more and find ways to promote them because nobody will be able to just stumble onto their show like I and many others did years before on terrestrial radio.

Not that I really care all that much, but I suppose the Playboy station will still be a premium channel.....?

 

[SteveK]

One good thing that XM is doing (March 1 - April 1) is offering existing subscribers the opportunity to lock into current rates by subscribing for one or more years. Two-year to five-year subscriptions are also available at discounted rates, and a one-year subscription apparently will be the undiscounted $9.99 rate. This is likely a one-time only offer, so it might be worth considering if you can afford the upfront payment.

Personally, I think this is generous of XM. I don't remember ever being offered the opportunity to avoid a price increase; certainly DishNetwork hasn't offered it and magazines I subscribe to haven't offered it either. By announcing a rate increase one month in advance and offering an option to take advantage of current rates, I must compliment XM on the way they are handling this inevitable rate increase.

Steve K.

 

[Brian L]

When I joined up, XM was not commercial free on the music channels; Sirius was. I said then that I would gladly pay the $3 difference if they went commercial free.

Well, they didn't do it right away, but it appears they heard me.

Small beer in the general scheme of things. While I do hate price increases, they still offer something that I gladly will pay for.

For me, O&A, Internet Radio, and Traffic News are completely irrelevant, so there is nothing here for me but paying more for what I already get....but I still consider XM a ridiculously good value.

I can never see myself going back to FM.

BGL

 

[Jed M]

To clarify my position, I have no plans to leave XM, nor am I upset with having to pay 3 dollars more. I just don't see where the value is considering most of these options were already free or a cheap add on. If most subscribers felt O&A or streaming music were a value, they probably would have already subscribed to them instead of XM having to raise the prices. Obviously the ala carte model did not work because the majority of the subscribers failed to see the value of the extra services.

 

[Joseph Bolus]

I was just beginning to consider XM radio as a means of obtaining the Atlanta Braves radio broadcasts this Summer. (I live in Birmingham, Alabama and for the first time in a decade Braves radio will not have a local outlet.) I had just about justified the $9.99/Month based on the availability of the Braves broadcasts; but I'll have to re-think now due to this new pricing structure.

I guess my question is: Will I be able to get the Braves in my office via the streaming side of their service, or will I have to also subscribe to the streaming MLB service for that? I have no windows in my office, so I doubt the XM Boombox I was considering purchasing will work in my office anyway.

 

[Ronald Epstein]

This is not necessarily true.

Subscribers like myself have been pushing XM to
make O&A available for FREE for over the past few
months. This is the only way to better spread the
"virus" and put them up directly against Stern.

O&A will pick up thousands of new listeners who
may have never previously subscribed and now get
"accidently" hooked.

This is a good thing.

 

[Bill-DC]

I use XM as much as I can and to now be able to use XM online at work is great as I'm in an area where there is no windows. I tried hooking my boombox with no luck.

The Washington Nationals announced their radio deal and where I live in Loudoun County, I can't pick up either station very well. So when I am out and about, I'll listen to the Nats on XM. Plus it's cool to have access to other teams as well. I love baseball on radio.

Not much of an O & A fan so that doesn't really affect me.

Three bucks more a month to me isn't that big a deal as I love this service.

 

[Ronald Epstein]

Here's another reason why I am excited about
the inclusion XM Online in the new price structure....

I often travel with my laptop in hand.

Any hotel I stay at I take advantage of their
broadband access.

I enjoy having music in my room and have been
forced to listen to Sirius online streaming.
Unfortunately, this means I am subjected to the
same music being played over and over again.

Now I have the opportunity to tune into XM
online streaming when on the road.

 

[MatS]

when I first read about the price increase I was not in the least bit happy

I could care less about O&A and have little need for XM Online. The only thing the competition offers that I remotly care about is the NHL and that is not even a factor at this date.

the fact that they are allowing you to lock in at current rates is the selling point for me

I will find the coin to pony up for the 5 year plan which will get me service for $8.33/month

and you must remember the key here to me is this

hopefully XM will be able to add even more exciting content under this new price structure and they won't turn away potential customers who used the price difference to justify choosing their service. This is even more important now with the other service massivly overspending for content.

 

[MatS]

I think there are legal issues that don't allow for streaming of most news, sports, and entertainment content

 

[Mark Bendiksen]

This isn't a huge surprise, and I'm such an XM junkie at this point that I'm cool with it. Besides, if three bucks more a month will help keep the music channels commercial free then I'm all for it. That having been said, I probably will go ahead and prepay for a year at the old rate because that's a fairly significant savings.

 

[Jeff Adkins]

Well at least now we can put to rest the whole "XM charges extra for O&A and Sirius is giving us Stern free!" argument which made no sense considering the XM/O&A combo was still $1 less per month.

I don't really mind this increase, although if they start to move towards the $20 range I will seriously reconsider whether it has enough value to justify the price.

I've had both services for about 5 months now and I was going to post a long comparison and review. However, after re-reading Ron's in-depth comparison, it would be pointless since I pretty much agree with everything he wrote.

If the main attraction of Sat. Radio is to get away from the corporate, market research playlists, I have no idea why anyone would purchase Sirius. I know it's been said here before, but it is essentially FM without the commercials and some cursing. I grew tired of the music on there after about a week. It was very safe and corporate-sounding and much worse than I expected in this regard. I guess some people like that but it's not my cup of tea at all. Everything Ron says about the repeats is true. It doesn't appear to have improved since I first got it back in October.

I listen to a lot of talk radio and the talk radio channels sound horrible on Sirius. Almost unlistenable.

Also, I can do without the 17 or 18 days a year of NFL coverage (since the Sunday and Monday night games are available on my local AM sports station).

I did like the DJ banter on Sirius. That was the one area where I felt they had the advantage. Otherwise, XM was better for me in every other category.