XM, Sirius promise low cost packages, more choice
Tuesday, July 24th, 2007
US satellite radio companies Sirius and XM have promised a variety of subscription packages that cost up to 46 percent less than current plans if their merger is approved. In a bid to allay critics’ concerns that their merger would raise prices and limit programming choices, the two companies announced several new pricing options they said would offer consumers more choices than they could provide individually.
Under one package, customers could pick 50 channels on either XM or Sirius for $6.99 a month. Additional channels could be added, starting at 25 cents for some music and news channels, ranging up to $6 for shock jock Howard Stern’s show. Currently, subscribers pay about $13 a month for more than 100 stations on either XM’s or Sirius’ systems.
The XM-Sirius deal would combine the only two providers of satellite radio service in the United States and needs approval from the Federal Communications Commission and antitrust authorities at the Justice Department.
The two companies, which together had more than $1.7 billion in losses in 2006, said the new “a la carte” packages will work only on satellite radios that have yet to be sold. Other packages will be available on existing satellite radios. The new programming would be available beginning within one year following the merger, which the radio companies hope to complete later this year.
The National Association of Broadcasters, which has likened the merger to a government-sanctioned monopoly, said policymakers should not be “hoodwinked” by the announcement. “Nothing is stopping either XM or Sirius from individually offering consumers a more affordable choice in limited programme packages,” NAB spokesman Dennis Wharton said in a statement.
XM and Sirius said that they will file on Tuesday their joint reply to the FCC now that a period of public comment on the merger has closed.
Consumer groups, the NAB and more than 70 lawmakers have come out against the merger. But special-interest groups that get a platform from satellite radio, such as the National Association for the Advancement of Colored People, the Hispanic Federation and National Council of Women’s Organizations have voiced their support.
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