By Ed Oswald | Friday, May 29, 2009 at 11:58 pm
Already peeved satellite radio customers will have one more reason to be upset with Sirius XM: yet another rate increase. While you were able to escape the last one by simply electing to forgo online access, this one is unavoidable.
Every subscriber will pay at least $2 more per month. The reason is this: beginning in August, the company would be able to raise rates to cover the costs of higher royalty payments to the record companies.
The royalty rate increases were allowed by the FCC as a result of a December 2007 agreement on those rates. The company was not able to pass along these increases due to the stipulations of the approval of the merger. However:
“After the first anniversary of the consummation of the merger, the combined company may pass through cost increases incurred since the filing of the combined company’s FCC merger application as a result of statutorily or contractually required payments to the music, recording and publishing industries for the performance of musical works and sound recordings or for device recording fees.”
That anniversary is coming up on July 29. According to unconfirmed reports, after this date a $2 charge on the primary radio, and a 97 cent charge on additional radios will be applied as a “royalty fee.” In other words, you will be paying at a minimum $14.95 per month for service.
People with knowledge of the situation are quick to point out that this isn’t an increase from Sirius XM per se, but rather a pass through of charges that were already being paid by the company because it can no longer afford them. You don’t say–after all its financial situation is pretty damn bad.
(See this link for a copy of the internal memo to customer service reps who are sure to be facing the brunt of yet more consumer dissatisfaction.)
Worse yet, this fee will increase by .5% per year through 2012. Thus it will be at least $2.10 in 2010, $2.21 in 2011, and and $2.32 in 2012. So much for those rate freezes eh?
This is really bad for Sirius XM. The Internets are flooded with consumer complaints about the service post-merger, and many are looking for a reason to drop sat radio like a rock.
I don’t see how the company doesn’t lose more customers over this. The company better get more responsive to programming complaints or there may be big trouble in sat radio-land.
Sirius XM customers out there — is this the last straw for you?