Sirius XM Announces Yet Another Rate Hike
Here we go again, it has only been a few months since the March 11th rate hikes that drove subscribers into a frenzy and already Sirius XM is announcing another rate increase for their subscribers. This time around Sirius XM is laying blame to the ever increasing Music Royalty Fee.
In a recently created memo posted on the XM website the company notes that, effective July 29, 2009, a U.S. Music Royalty Fee will be added to subscriber invoices. The fee is slated at $1.98 a month on their base subscriptions ($12.95) and $.97 for base plans that are eligible for a second radio discount.
Sirius XM is quick to point out that “Unlike terrestrial radio, both Sirius and XM are required to pay copyright music royalties to recording artists, musicians and recording companies who hold copyrights in sound recordings.” Sounds like the guys at Sirius XM are more then a little bitter about their current situation and for good reason. The bottom line is that both Terrestrial and Satellite Radio generate revenue by playing the works of others and the method in which they generate that revenue (whether ad supported or subscription based) should not matter.
For those of you legal buffs who might be concerned with the legality of this fee increase being consistent with Sirius XM’s merger commitment not to raise prices for three years, Sirius XM has this to say “This fee is consistent with our commitment not to raise the base price of specific service plans for three years after the merger. The FCC decision approving the merger between SIRIUS and XM permits the companies beginning July 29, 2009 to pass through to subscribers any increases in music royalties since March 20, 2007, the day the companies first asked the FCC to approve the merger.”
You can find further details on the U.S. Music Royalty Fee increase on the XM website.
The merger agreement allows for SXM to pass along the *increases* since March 2007. I am not sure what the percentage was in March 2007, but the current increase is from 6 to 6.5 percent. In other words, prior to this the .78 per month could be considered built into the subscription price (single radio $12.95 subscription). When it goes to 6.5 percent, this is only 7 cents increase in royalty rate. Even if subscribers paid the entire 6.5 percent rate on top of their subscription rate it would only be 85 cents!
I don’t mind supporting a company whose product I enjoy. I really mind being treated poorly by insulting my intelligence by using deceptive language, implying that the entire increase is for the royalty payment, instead of calling it what it is – a 9% rate increase plus shifting the entire royalty cost to its subscribers.
We haven’t made up our mind, yet. We will either downgrade our service, or cut it out altogether. I hope enough others are doing the same. They clearly need a wake up call.
Just canceled both of my subscriptions.
I love Stern, I will miss him alot.
The music programming has gone downhill, cheaper royalties on less than popular songs.
Then the rate increase for internet and secondary subscriptions.
This latest move was the straw that broke the camels back.
I hope Stern moves to a different medium at the end of his contract.
I am canceling. They should be absorbing the cost of these royalty fees.
Isn’t music what we where paying for in the first place? RIDICULOUS!
Ever since this Mel Karmazin took over, there are increases in subscription fees, royalty fees, and MORE COMMERCIALS!
Even on Stern they are starting to make commercial segments longer and longer… from a few minutes to ten minutes and now close to 15 minutes in commercials.
Don’t believe for one second they are not making MILLIONS annually on these new commercials. What happened to commercial free radio? Aren’t we we paying for that as well?
GOODBYE SIRIUS! GOOD LUCK WITH YOUR RATE INCREASES!
Just downgraded my services. No way will I pay additional royalties to an industry (RIAA) that sues its own customers.
I just canceled both my subscriptions. the company is pathetic and conveniently pulled this as Howard goes on yet another vacation, not that he is likely to care about all the BS he misled us with about rate hikes post merger. I will just have to live without the four days a week of even shorter show from Howard. as I mentioned in my email to Sirius (which i know was pointless) i cant wait till the company goes under when Howard leaves. Its funny how last week he was so concerned about being treated like an A-hole but that’s exactly what he does to us…and yes the $500,000M man is Sirius.
yeap I’m with you guys, I’ve been with Sirius for 5 years and I’ve seen nothing but increasing bad programming and excuses to increase rates. I’m done!
Yep I have canceled my sub! So much for not being a monopoly. After the merger they added a $3 internet fee (free to subscribers before merger… sneaky way around the anti-competitive laws). Then they finally release the iPhone app without Stern & NFL (and you know that there will be a seperate fee for that down the line). And now an extra $2 fee. I am at $18 a month. I’m out! Stern is not as vibrant as he once was, 4 days a week, more vacation time than the royals and he keeps saying that he is retiring when his contract is up. For $18 a month I could have Tivo & Netflix.
So after going back and forth for weeks, I decided to cancel after 3 years. I don’t know what they’re thinking…we are in a recession right now and people are looking for ways to save money. They way to retain your loyal customers in times like these is not by increase. I had already forgiven and forgotten about losing my internet radio, but lets be honest; this is just plain greed. Nope, I don’t think I’ll be part of this game any longer. Best of luck SXM, I hope your marketing people come up with something brilliant…
I called up to renew and add Pioneer INNO to my subscription. I always thought the service was over priced and I had almost decided to let it go. When the customer rep told me about the Music Royalty fee I said just forget it. I am not paying anymore money. The rep instantly waived the Royalty fee for both receivers and she also waived the setup charge for the Pioneer INNO.
This is all a bluff. If you tell XM you are going to cancel they will waive these new fees. They cannot afford to loose subscribers.