However, its hard to bet against Sirius XM here. It ced a much steeper challenge with last Januarys 12% rate hike,brainaneurysm signs. and it went from forecasting just 1.3 million net additions last year to tacking on 2 million net subscribers.
The timing isnt ideal. Most Sirius XM subscribers probably cracked open their first paychecks of 2013 earlier this month to find that their take-home pay is noticeably lower after the end of the payroll tax break that concluded in 2012. Budget-minded milies will need to assess what theyre willing to do without, and satellite radio may be a casualty.
The rub for Sirius XM is that unlike cable and satellite television providers that ce escalating rates from networks and broadcasters, Sirius XMs costs are actually heading lower. Programming and content costs have declined 1% over the past year, even though its subscriber base has expanded by 9%.
Now well see how things play out on a much smaller scale.
Sirius XM Radio Inc (NASDAQ:SIRI) didnt just survive last years 12% rate increase. The satellite radio provider thrived, closing out 2012 with 2 million more subscribers than it had when the year began, despite bumping its basic monthly rate to $14.49 in January.
Subscribers didnt flinch then, and its easy to argue that they wont flinch now. Media consumers are so used to seeing their cable bills creep higher every so often that tsatellite radiohey dont often realize how much more they are paying for entertainment than they were a few years ago.
This doesnt mean that Sirius XM is ripping off its customers. Just as Pandora Media Inc (NYSE:P) has been lobbying to ease the burden of rising copyright royalties -- that terrestrial radio stations dont pay -- Sirius XM is also forced to pay a larger chunk of its revenue to the music makers with every passing year.
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Sirius XM is advising its 23.9 million subscribers that it willCan Sirius XM Radio Inc (SIRI) Survive Another Price Hike, satellite radio be bumping its music royalty fee higher on Feb. 1. Starting with next months billing cycle, accounts will see their monthly royalty charges go from $1.42 to $1.81 on the most popular Select and Premier pricing plans. The rate for additional receivers under the same account will also go up by a little more than 27% to $1.25 a month.
The music royalty fee in addition to the $14.49 monthly fee isnt new. Sirius XM began to pass on the royalties that it pays out to composers,world education. obese812.typepad.com publishers, artists, special education and record labels in 2009.
