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I keep hearing about the new plans that Sirius is going to be offering which hopefully will increase revenues. What I don't see is any discussion about the number of current subscribers that might choose a lesser plan. I would like to see any comments,opinions or links to previous articles on this matter.
I've seen it discussed before earlier in the merger proceedings when the alacarte idea was first thrown out on the table. Since then, I haven't really seen anyone take a firm position that it would ultimately hurt the company in terms of revenue. Probably because its pretty unlikely.
Alacarte has the ability to resign lapsed subscribers, entice free trials to sign on for some loose change, and draw a whole new cash strapped subscriber base.
Every downgraded subscription would lose 6 dollars in revenue (13 monthly-7 alacarte). So for Sirius-XM to be losing money on the deal, they would need more downgraders (from their 20 million base) than new acquisitions.
With people throwing down the extra money for the best of packages, and all of this in place, I gotta believe the marketing department in the back room did their homework. They wouldn't propose such a massive change to their subscriber model without being aware of the worst case scenario.
Plus, who is to say that all new subs will be alacarte only. There is a whole mess of people holding off because of the merger implications before they chose a service. Ultimately, even if they barely break even, its about growing the subscriber base. The more ears they draw, the more attractive the service is to advertisers, and Mel's been beating the "grow advertising revenue" drum for months now.
Remember, an existing sub would have to buy a new radio to downgrade to the $7 package. I think more new people will buy into the $7 deal than old subs will downgrade. But for someone who might be considering canceling altogether, this could keep them... assuming they are willing to buy the new hardware.
Does the company make any money off these new radios? Do they lose money?
Im glad you asked and I think the answers above are probably accurate. I would venture to guess that anyone strapped for the $12 a month would probably opt for the $6 a month package rather than drop entirely.
Therefore I think it would help retention. For most people in the $12 package it probably isn't worth the hassle to change to a $6 package either.
There is also the american way of wanting it all. For a measly 6 more $$ you can have it all.
And overall, I bet more people on the sidelines jump in at $6 than would downgrade.
Ala carte equals retention and new demographic.
Maybe SIRI XM will figure out a way to broadcast a $6 sub to those 20 million deactivated radio owners. Maybe they won't have to replace those radios to get a $6 sub along with the free teaser channels Mel is thinking about.
You also have to remember that those downgraded plans do not offer the best content such as NFL, Stern, Martha, etc, etc. I was looking at if it would be worth it to downgrade, but my favorite channel (XM Comedy 150) is not included in the $6.99 plan.
I am still waiting to hear what Mel has in store for the overlay technology that they have patented.... That is one of the industry changing technologies that will really pay off big for the company.
off topic, Newman, what is the overlay technology?
I think Mel should be very careful on screwing the shareholders I bet you MANY of them like myself are subscribers.
As much as I love the product I will cancel (as I hope many would) my supscription.
Pretty sure this is what he was referring to.Quote:
Originally Posted by imromo24
http://www.google.com/patents?vid=USPAT7363000
But this isn't patented by the companies themselves, wasn't it (ex) employees?
:annoyed:
Newman :out:, you gotta git rid of that "disclaimer" man , yes we all know you own shares , come to think of it , i'm sure everybody on this site does too. Being an observant reader, that's just an extra line for me to read.
disclaimer = see what i mean ? :out:
WJDJFD: What are you talking about with that comment?
Alternate Revenue Sources
THIS is what I am talking about. (Z, you were correct and I used your link in my article).
Let me know what you all think.