XM-Sirius Merger Will Double Monthly Prices?

What does the XM-Sirius satellite radio merger mean for XM customers? Well, according to one customer service rep, it means mean prices are going to roughly double in May. Here’s what she said to one of our tipsters:

This is strictly confidential, but all the paperwork is signed and ready to go, and XM has fully acquired Sirius Radio. Come May, there will be a substantial price increase for XM Radio, as it will, in June or so, host all the Sirius channels. It would be best to simply extend your XM plan as we will honor your current contract price per month before we begin hosting the Sirius stations.

The tipster said he believed she said the price was going to double. Perhaps the customer service rep just wanted to score a renewal, but if true, it would certainly at least be ironic considering when the DOJ approved the deal was they said, “the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers.” However, reader comments on this post and this post over at Orbitcast say this customer service rep is full of pure baloney.

Comments

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  1. radio1 says:

    Nice spin.
    Since it was Mel Karmazin (Sirius) who bought XM.

    If the rates at Sirius double, I forsee lots of issues– starting with me.

  2. coan_net says:

    Sounds like they were just trying to get some users to increase their contract now…. by scaring them about a big price increase.

  3. stageright says:

    “the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers.”

    All that means is that they’ll be able to boost rates to cover the additional costs. If both companies are breaking about even, then they’ll pretty much have to double the price (twice the content) to continue to break even…

    No, that isn’t how it works, but I’m betting that’s how the DOJ thought it through lol

  4. bostonhockey says:

    I call BS on this ‘rumor’. For starters, how can you mistake who is acquiring who in this merger? For the record, Sirius is attempting to acquire XM; not the other way around.

  5. ratsgnawingatmyface says:

    Got 2 Sirius receivers in 2 cars and will NOT renew if the price goes up even a little bit. 50+ GB of MP3′s will keep us entertained just fine.

  6. Illusio26 says:

    I get XM now with a deal they offered me for $77 a year. If it increased more than that I would just cancel it. It’s not worth much more to me.

  7. Also, look for advertising to appear on XM as soon as their subscriber base reaches a certain threshold. It’s inevitable, just as it was for cable TV.

  8. @Steaming Pile: XM already has a few channels that play advertising

  9. BK88 says:

    I think this rumour is false. XM doesn’t have the bandwidth to carry
    all (or even a good number) of Sirius’s channels. Of course they could
    just all be the quality of the traffic reports… sounding like
    RealPlayer in 1998.

    Unknown to most people, XM also delivers weather to several
    industries including aviation in cockpits, marine weather to boats, an
    basic weather to some government vehicles.

  10. rbb says:

    Way back in July, this pricing scheme was published here: [www.theregister.co.uk]

    “The proposed plan comes in a couple of flavors:

    * A La Carte Option 1: $7/month for 50 channels. Customers will be able to choose from XM or Sirius channels exclusively, with the exception of “premium” channels. Additional channels can be purchased for 25 cents each per month. “Premium” channels are available for $3 or $6 each per month. The maximum charge will be $12.95 per month. This option is only available for subscribers using next generation receivers who select channels via the internet.
    * A La Carte Option 2: $15/month for 100 channels from either XM or Sirius. Choices on the other network, however, are limited to “the best of” channels. This option is also only available for next generation receivers.
    * XM Everything: $13/month for approximately 170 XM channels.
    * XM Everything & Select Sirius: $17/month. All XM stations and a few Sirius ones thrown in. Customers can use current equipment.
    * Everything Sirius & Select XM: $17/month. All Sirius stations and a few from XM. Customers can use current equipment.”

    The problem I see is that ala carte is only available to those with “next generation” receivers, meaning those of us with built-in units in our cars may be SOL :(

    I will drop the service entirely if that is the case.

  11. bostonhockey says:

    Howard 100 and 101 (on Sirius) has lots of advertising. As does the NFL network and a couple of the ESPN channels.

  12. JustAGuy2 says:

    The prices aren’t going up – I think the sales rep was just trying to get a contract locked in.

    If the merger ISN’T approved, the companies indicated that they were going to raise prices.

  13. LynchMob52 says:

    Consumerist I am shocked that you would even post this nonsense. First of all the definitive agreement has been signed for over a year and has been just awaiting DOJ and now FCC approval. “This is strictly confidential, but all the paperwork is signed and ready to go, and XM has fully acquired Sirius Radio”….LOL. Plus the deal still needs to go through the FCC so its not out of the woods yet. Im sure some packages are going to double in price becuase you are getting double the content. Remember before the problem is that only some stations could only be found on one provider (Howard Stern). Overall I think it will be about the same and allow for more a la cart pricing. I wouldn’t be suprised if this “Tipster” was actually someone from the company trying to get more subscribers.

  14. KyleOrton says:

    I call BS. Sirius already released the post-merger packages and not a single one A) Costs twice the current price (max is $16.99/mo) or B) Carries the total XM + Sirius lineup (the $16.99 plan is all of 1 and 11 of the other).

    [www.siriusmerger.com]

    All I want is my current XM lineup + NFL.

  15. bloatboy says:

    I’m pretty sure the DoJ understands how competition works. If the combined companies actually increase their monthly rate, they will lose existing subscribers (including me), and have a much harder time getting new ones. After all, there is no shortage of alternatives. iTunes music store, Amazon Unbox, Netflix “Instant” movies, hell, even the regular AM/FM radio stations in my area if I want.

    I think coan_net had it correct. A rumor created to fire some short term sales.

  16. ptkdude says:

    @Jerkwheat: @Steaming Pile: Just to further clarify, XM already has a few MUSIC channels which broadcast advertising. This was a result of ClearChannel being one of the investors in XM. They sued XM claiming they had the right to broadcast advertising on their music channels, and the court agreed. As for non-music channels, most (if not all) of those have advertising for both Sirius and XM. None of Sirius’ music channels have advertising.

  17. ClayS says:

    CSR: very smart, Consumerist likes her
    DOJ: very stupid

    Any chance XM will lose subscribers if they double their rates?

  18. snoop-blog says:

    I like how the dog is pooping out the XM. Hilarious.

  19. satman says:

    From this mornings Skyreport (www.skyreport.com)

    XM, Sirius Take A La Carte Ideas to Portals
    Last week, representatives from XM and Sirius met with officials at the Federal Communications Commission, including FCC Chairman Kevin Martin, about their pending merger.

    According to a filing describing the meetings, items discussed at the Portals included last week’s decision by the Justice Department to clear the merger and a request from the companies that the commission quickly approve the transaction. The companies also outlined what possible programming packages, including a la carte offerings, could look like after a combination of the satellite radio companies.

    Both XM and Sirius endorsed the a la carte concept early in their merger efforts. According to the companies’ FCC filing, the a la carte proposals included an offering of 50 channels from one satellite radio platform, as picked by a customer, that would start at a price point of $6.99. A customer can add a channel for 25 cents, or add a premium offering for $5 under the ideas floated by the companies last week.

    A second a la carte package proposal with 100 channels, again selected by the customer, would sell for $12.95, and could include a mix of channels from the two respective services under a “best of” scenario, stated the filing.

    There also are separate “Sirius Everything” and “XM Everything” packages listed in the FCC filing with channels from the respective services. The everything packages could sell for $12.95 for each service, and would offer 130 channels from Sirius or 170 audio streams from XM, stated the filing.

    The packaging proposals outlined by the companies also included family-friendly, music-centric, and news, sports and talk offerings.

    Meanwhile, the Media Access Project approached the FCC last week about the merger, suggesting the deal could be harmful to the public interest. Nonetheless, the advocacy group said if the agency approves the transaction, conditions should be attached, such as a set-aside mandate for non-commercial educational programming or a requirement that a combined satellite radio company lease capacity to unaffiliated commercial programmers.

  20. BugMeNot2 says:

    Who posted this crap the NAB? As already mentioned, Sirius/XM disclosed their pricing plans as part of the merger approval process.

    Secondly, everyone seems shocked to find out that satellite radio has commercials. They never claimed to be ad free, the statement is “commercial free _MUSIC_.” Of course talk shows like Howard Stern have commercials. You expect talk show hosts to sit in front of a microphone for 3-5 hours without a bathroom break or anything? Get real.

    I’ve had Sirius since Feb. 2000 and I love it. It’s the only thing I listen to in the car, and I even listen to it at home at least as much as I watch TV. If you don’t have it, you’re really missing out.

  21. Greeper says:

    Do you print *anything*? This is clearly inaccurate and about 30 seconds of fact-checking would have cleared that up. I believe I read in WSJ had an article detailing promises made by the new company to the FCC, which included a la carte pricing, which would offer cheaper pricing tan now offered. I’m disappointed that consumerist published this.

  22. wallapuctus says:

    I really think this is FUD by the NAB. I listen to Stern almost daily and he’s constantly been promising that the prices wouldn’t increase. Think what you want of him, but he’s not a liar.

  23. foghat81 says:

    shenanigans! anybody with half a brain sees this is a garbage “article”

  24. smoothtom says:

    Hmm? This is all wrong–Sirius purchased XM, and this flies in the face of the pricing structure that’s already been announced. The companies say that the new company will offer both Sirius and XM as separate services, with packages (and new radios) that offer selections from both.

  25. Jim says:

    Yeah – this is BS. Last bit I heard was prices were if anything going to come down… but… to get some of the new features of the merge – you may have to buy a new receiver…

  26. As long as this merger doesn’t screw with my XM channels, I couldn’t care less. The Verge (XM 52), Opie and Anthony, NHL and MLB – that’s all I need.

  27. dlynch says:

    this is junk, and i am surprised to see the consumerist reduced to rumormongering that 15 seconds with google would serve to completely dispute.

  28. calvinneal says:

    My God this is lousy information. XM was bought by Sirius, not the other way around. Will prices go up in the short term? Probably not, however, the long term is a different story. The story is filled with factual errors as has been pointed out by about everyone on the forum. The deal has not been approved by The federal Communications Commission.

  29. MadameX says:

    This is totally untrue. The post-merger pricing was announced by XM and Sirius early last week.

    [www.orbitcast.com]

    [www.orbitcast.com]

    If anything, the new pricing structure is a benefit to people who only listen to a select few channels.

  30. SuffolkHouse says:

    To be fair, they have contracts to pay for the programming they provide. While paying Stern, Major League Baseball, NASCAR and Oprah, neither of these networks has earned a penny – each running in the red for years. This was the only way to move into profit – buy the other so that the other wouldn’t undersell them. Now there is no worry – so they can raise their prices where they need to be.

    I dropped Sirius after my two-year subscription because Stern got uncomfortably vulgar. He can claim all he wants that broadcast radio restricted his creativity, but shoving screws into your foreskin so gay men can guess what is in your “pouch” really isn’t that creative. It has shock value – and it got old very fast.

    I also dropped it because Radio Shack does no honor their rebates. I should have received a $50.00 rebate – the only reason my wife reasoned she could afford it as a gift for me. They screwed us.

  31. b612markt says:

    Worst Consumerist Tip Evar!

  32. ChuckECheese says:

    XM’s equipment is mostly cheap and overpriced. If you don’t have satellite radio, you may not realize that you can’t listen to satellite the same convenient way you listen to regular radio–your account is tied to your physical receiver, which you have to move around. The antennas for these devices are very sensitive, and you can’t just set the radio down and expect it to work. Hope you like lots of cables strung about your home and car.

    The experience of listening to XM is a lot like cable TV–lots of channels, nothing on. A considerable number of their channels are dedicated sports channels that never have any programming at all on them, meaning there are fewer actual on-air stations available than they say–and you haven’t lived until you’ve listened to a golf game on XM radio. On talk stations, the commercials are really long, more than 15 mins/hour. On the music channels, they have these pseudo-ads, hawking their other channels, which is sort of like preaching to the choir.

    In the past several months I’ve noticed the quality and variety of music has taken a dive–I can hear the same songs every day just driving to work and home, often played on more than one channel. Customer service is the typical incoherent, unhelpful India experience. In no way is this worth more than they’re charging now ($13/month)–I don’t feel like I’m getting my money’s worth as it is.

  33. This rumor strikes me as the same thing as the sales rep at a store telling you a sale is about to end so you need to buy now. The pricing plans may change and there may well be a new, expensive top tier, but the DoJ and FCC are gonna be on them quick for monopolistic practices if they double their standard package price.

    Some of the stations that have commercials are not exclusively Sirius/XM channels, like the NFL and ESPN, they also broadcast some of their programming on regular radio.

  34. Juggernaut says:

    Hard to put any faith in a rumor that gets the initial premise wrong… Sirius is taking over XM

  35. sleze69 says:

    This has been discussed adnausem over the past year. If you want to listen to ALL sirius and ALL XM channels, you will initially have to pay for both contracts. You won’t need to upgrade the radio.

    If you, like me, don’t care about XM’s stations, you will keep your pure Sirius stations for the life of your contract.

  36. oakie says:

    why did you bother to post this crap? trying to scare the consumers you pledged to “protect”?

    everything about this smells of BS. their installed base is too small, even combined, to even consider raising rates at this point. satellite radio is still not even considered a “want” in most peoples’ minds, much less a necessity.

  37. drdavidge says:

    Yea Consumerist.. this is pretty bad. I hope you guys edit this post with the relevant factual info, instead of these false rumors.

  38. THEbeatmix says:

    This is all BS. First Mel is purchasing XM. So XM wont be acquiring Sirius I believe its the other way around, and based on the information Howard Stern has discussed it is a Sirius-XM merger. Mel will continue to run operations for both organizations. Mel has personally come out and stated that rates from consumer will not double and more than likely will reduce costs to customers. They are going to also offer a type of ala-carte plan. This article is making assumptions, I would like to see the hard facts supporting this information. Come on Consumerist, lets check the facts before we start posting BS rumours.

  39. JustAGuy2 says:

    @sleze69:

    To be clear, if you want to listen to all XM and Sirius channels initially, you’ll have to have two radios. There won’t be any radios that can handle both at the start. With one radio, you could get the $17 package which gives you all of one service (the one whose radio you have) and the “best of” the other service.

  40. unklegwar says:

    Way to fact check. Sirius Acquired XM not the other way around.

    And the pricing tiers have been published. No rumors about it.

    Consumerist is going to way of mainstream news media. Rush to get the story out, don’t worry about checking it at all.

  41. RokMartian says:

    Neither company is acquiring the other. Both companies call this a “merger of equals”. Mel Karmazin is the current ceo of Sirius and will remain the CEO of the combined company, so it is a common misconception that Sirius is buying out or acquiring XM. In reality, XM is the larger of the two in subscriber base and revenue.

  42. Greeper says:

    Companies call it merger of equals for tax reasons. in reality, sirius is buying XM, as evident by what will happen to the stock (sirius buys xm stock).

  43. I doubt this would happen, if it did you would see a massive exodus of customers. Stupid “HD Radio” would see a huge boost, UGH.

  44. xanadu1979 says:

    This is total BS. If you look around on the Sirius or XM fan boards you’ll see that the customer service is notoriously uninformed.

  45. i BaldEagle says:

    I’m joining the list of people calling BS on this rumor. The merger isn’t even finished yet, not until the FCC approves it. And even if this were true, there’s no way in hell a CSR rep would know this information. Lastly, both Sirius and XM know if they raise prices it will spell the end for satellite radio. Careful with rumors Consumerist, they hurt credibility.

  46. Mantichora says:

    Sounds like an early April Fool’s joke to me!

  47. henwy says:

    It’s kinda disturbing that a lot of the information here is posted without even minimal amounts of fact checking or cooboration. A lot of people commenting seem to have found relevant information within minutes that casts significant doubt on the story.

  48. LionelEHutz says:

    Anybody who thinks that prices won’t go up after the merger is living in fantasy land. Also, I have a slightly used bridge to sell you that crosses from Manhattan to Brooklyn.

  49. Skellbasher says:

    This ‘tipster’ is a kook.

    First, please refer to the following document. This is the merger proposal submitted to the FCC.

    [fjallfoss.fcc.gov]

    Attatchment A shows the corporate structures of XM and Sirius pre and post merger. Satellite CD Radio, Inc, owned wholly by Sirius, is merging with XM Satellite Radio Holdings Inc. The combined entity will be wholly owned by Sirius Satellite Radio, Inc.

    Therefore, while a merger is in fact taking place, in effect Sirius is buying XM. The stock transaction supports this; XMSR is converting to SIRI at 4.6:1.

    Secondly, the post merger pricing plans provided to the FCC and other outlets clearly show no price increased as this tipster states.

    Poor showing by the Consumerist on this. Front line CSRs surely have no significant knowledge of a transaction that has yet to be approved by the FCC, and taking that unreliable information as gospel from a tipster is poor form.

  50. radio1 says:

    @bostonhockey:

    ‘Content’ Channels on Sirius do advertizing. Howard, Raw Dog, & Martha, etc… But they are much, much less than they would be on OTA FM.

    The music channels on Sirius are no-commercial.

  51. Buran says:

    Without piling on the OP/fact checking, what I want to know is what happens to existing Sirius Lifetime subscribers — I signed on for the lifetime deal due to getting a Sirius receiver with my new VW which I plan to keep past the 3-year breakin period. I am guessing it’ll just stay the same with the same channel lineup, which is fine as most of my in-car radio use is for NPR and occasional music channels — Sirius has that. Sports and shock jocks aren’t my interest.

  52. Goatweed says:

    if the rep really said that, he/she is sadly mistaken. There will be no increase and in fact post-merger if people wanted to leave their programming exactly as it is, it would be done at the same rate they’ve been paying.

    What’s this about a $77/year deal? Any details on that?

  53. bricklayer says:

    Bababooey! Bababooey! Bababooey!

  54. mduser says:

    @Buran: Normally lifetime subscribers can change the receiver up to three times for a fee, but I’m hoping Sirius will be smart enough to waive the fee for those who will be forced to upgrade to get the latest.

    Personally I’m hoping that the Stiletto can be updated with a firmware upgrade to get both Sirius and XM, but it’s not likely, so it will become a rather nice MP3 player.

  55. Dancing Milkcarton says:

    As soon as I read that XM is acquiring Sirius it was clear this story is horseshit. Nice try.

  56. RRich says:

    This is horsehit for all the reasons pointed out above. Just wanted to concur.

    But as a longtime XM guy, I’m looking forward to listening to Stern again so I can get updates on lesbians and enemas, plus hear him curse. That’s great radio!

  57. TechnoDestructo says:

    “but if true, it would certainly at least be ironic considering when the DOJ approved the deal was they said, “the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers.””

    We are living in an age of irony.

  58. aeproberts says:

    Why even post this junk? It smells terribly like a feeble attempt to sock the readers of this blog. I love this site, but that headline is junk.

  59. DojiStar says:

    What a load.

    Sirius is getting XM, not the other way around.

    There are no dual service radios produced as of this time so you cannot receive both services on one radio so you cannot subscribe to both services at the same time.

    The merger still has not been completely approved by the feds therefore no paperwork can be signed and no merger can be completed. So XM did not fully merge with sirius.

    There is no way the merger will be approved before the end of the year, let alone in a month or two.

    The Consumerist really should have confirmed this story before putting it up. There is ample publicly available info that could have easily disproved this story as an early April Fools joke.

    A vary bad April Fools joke at that.

  60. JustAGuy2 says:

    @DojiStar:

    Agree except on this point “There is no way the merger will be approved before the end of the year, let alone in a month or two.”

    Merger approval will be done within two months, max. They have DOJ approval, just need FCC.

  61. Coder4Life says:

    you people have not followed up with the whole merger. If they were to double the price they would be creating a monopoly and the FCC would never approve of this. So to this guy go find some credible information

  62. parad0x360 says:

    Considering Sirius is buying XM (rep said xm is buying sirius) this rep is clueless on every level. They already said prices will not go up and in fact will probably go DOWN.

  63. BugMeNot2 says:

    This post is totally wrong and should be removed immediately.

    [siriusxmnews.com]

    [fjallfoss.fcc.gov]

  64. notallcompaniesareevil says:

    Hopefully the Consumerist staff “takes it seriously” and issues a correction. Bad information is worse than no information.

  65. notallcompaniesareevil says:

    Well, it looks like they have issued not a correction, but a replacement for what they had written earlier. The honest thing to do would be to still have the “No wonder the economy is in trouble, our own government doesn’t even understand how basic competition works. ” language up there. You know, like they make the posters do with the lack of an edit button.

  66. Pinwiz11 says:

    Delete this post. It is blatantly false and the worst kind of rumor mongering. At the very least change the title.

    Shame, Consumerist, Shame. Horrible reporting.

  67. gravedi66er says:

    The DOJ isn’t going to approve a merger request in which the main issue is “Is it going to create a monopoly?” and then the merged company immediately doubles it’s prices. This story is bogus crap and should be removed immediately.

  68. mduser says:

    $10 says the tipster belongs to the National Association of Radio Broadcasting, or whatever Clear Channel front that is trying to stop the merger because people are getting tired of the commercials and crap music on “terrestrial radio”

  69. Superborty says:

    If the prices come down, maybe they can boost their subscriber base. The prices now are completely absurd. Maybe they should pay gazillions to Stern and the others…

  70. Exek says:

    Totally BS here is the real pricing plan post merger [fjallfoss.fcc.gov]

  71. DaleM says:

    sirius is aquiring XM so the basic facts of the story are wrong.

  72. bossco says:

    If they double prices, nobody will subscribe. At 12.95 a month for radio, they are pushing it anyway. Especially with the prices of basic foods and gas skyrocketing.

  73. rjhiggins says:

    Ben, your credibility is shrinking by the day. You don’t even show the smallest bit of skepticism, even when the basic premise of the posting (the wrong company doing the acquiring) is wrong?

    Listen to your comments: They’re trying to tell you something. But it’s not clear you’re listening — kind of like all the companies you complain about.

    Maybe I’m wrong — perhaps you are “taking it seriously.”

  74. Greeper says:

    I have to agree that consumerisy in general has gotten pretty sloppy. A site devoted to accountability that posts a false article, provokes a fairly unanimous rebuke form loyal commenters, and continues to ignore them? If it were a company I would assume the CEO was busy shopping for another job when the compant is kind of ignoring its own mission/standards.

  75. Ben Popken says:

    Read the last sentence on the post before making another comment. It’s been up for hours.

  76. JustAGuy2 says:

    @Ben Popken:

    Ben, tossing that sentence in there doesn’t really help, since it won’t be clear to later readers why the earlier posters were so negative on the story. In this case, you really should say (in bold) UPDATE: XYZ isn’t actually true blah blah blah.

    If you’re going to change a post, you should show how its been changed, just as a newspaper’s online edition will archive the original version with the correction at the bottom, rather than fixing the article and never indicating that a mistake was made.

  77. JustAGuy2 says:

    @notallcompaniesareevil:

    Agreed – Ben, correct, don’t delete.

  78. notallcompaniesareevil says:

    @Ben Popken: Ben, people have read that, and instead of satisfying, it’s actually antagonizing. It’s not honest to just change the text of the post without acknowledging that a mistake was made. Check out Boing Boing for a good example of the right way to handle things like this. They get stuff wrong (like all humans, including those that work at companies), but when they find a mistake, they cross out the offending text and say UPDATE: [ ]. Please do that here. No one will think less of you for having screwed up if you are honest with the mistake (see the post on Netflix vs. all the posts on Best Buy, et al.). If you continue to act like you know better than the rest of the world, including those who take time out of their day to listen to what you have to say, it will only come back to bite you.

    I hope the parallels with the companies you cover are not lost.

  79. Javert says:

    Wow. Now the Consumerist is posting rumours. Nice. When I first started coming to this site, it had real consumers with real issues…as of late, it seems to have digressed to just start posting more and more worthless articles. A rumour from a CSR is pretty much worthless. Do you realize how far down on the food chain a CSR is? I am not trying to degrade their position as I have been a CSR myself in the past but this sounds like an attempt to upsell now if this is in fact a real quote at all or just a fabricated rumour that you happened to pick up.

    Even the theory alone of doubling the price makes very little sense if you think about it. But hey, who am I to say but I heard from this guy who is dating a girl who’s neighbor’s cousin ate at a Wendy’s with a person who heard that if you eat pop rocks and drink a coke real fast you will explode!!!! BEWARE!!!

  80. MajorXP says:

    When did the Consumerist become a rumormongering site?