Sirius XM sticks it to subscribers
How's the Sirius XM satellite radio monopoly working out for subscribers? Not so well. Now that Sirius XM is the only game in town, it's nudging up fees for subscribers. Nice!
The one and only satellite radio company's boasts of its ever-increasing subscriber base are gone now, and the decline is significant. The number floating around the Internet is a loss of 400,000 subscribers. That still leaves 18.6 million, but there's no way of knowing how many of that number are full-price-paying subscribers.
Could the subscriber losses be attributed to recent price hikes? The family plan package went from $6.99 to $8.99 a month and there's a monthly $2.99 fee to receive Sirius XM stations over the Internet. That service was previously free.
Back in March of last year I asked who was going to pay for the merger, and now we know. We've lost favorite channels and pay more for the service. So please explain why the merger was such a swell idea?
And what about Howard Stern? His megabucks contract is nearing its end; can Sirius XM hang on to the former terrestrial radio god now that he's faded into near oblivion? Hunkered down on satellite radio, Stern's visibility ain't what it used to be.
But if the 2 million Stern fans paid an extra $2 a month for the privilege of hearing his semi-daily genius, would that help Sirius XM show its first-ever profit?
Over the past year or so, Sirius' signal quality has worsened. Again, the post-merger performance woes are widespread. My Sirius signals have improved somewhat in the last two months, but I still experience signal dropouts lasting a few seconds several times a day.
How about you?
Related story:
Steve Guttenberg is a frequent contributor to magazines and Web sites including Home Entertainment, Playback, and Ultimate AV. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure. 
No sales support on buying a newer, better radio over the DELPHI XM SKYfi i now posses.
Even third party sales reps can't provide info on new receiver and external antenna's. NO idea what size cable comes from antenna and the connect being used for a newer receiver.
They *said* you could continue it with extending your regular subscription, and they didn't on my account. Argh >_<
I've switched at work to Shoutcast.
I used to have 4 radios with xm until the price increase...I am down to three radios and soon to be 2. I will not totally get rid of sat radio because it's still better than listening to 40 minutes of commercials every hour. I do think the back door price increase was shady.
[CNET editor's note: Objectionable material deleted.]
Rush Limbough: 14.25 million
Howard Stern: 3.55 million
- Another Rush
Now I'll just use my MP3 player and/or Bestbuy to get my music. Personally I think Howard Stern was better on Terrestrial radio,
Luckily, my debit card expired before they were able to auto-bill me for the 3rd year (in advance) and a kind CSR from XM demanded that I accept all the increases and update my card info so they would be able to auto-bill me in the future or I would be sent to collections. Needless to say, I explained I couldn't be sent to collections for services yet to be rendered, and all I got in return was an angry tirade. Canceled my contract that day, even though I had 2 months left, hooked my iPod to the XM aux input on my truck and never looked back.
I haven't really followed the Sat-Radio scene for a while, but can't imagine it's still growing, they're charging more for a service with reduced functionality and content. Mel or whoever is running the company took an opportunity to redefine a medium and squandered it by making promises he couldn't keep, and alienating those the industry depended on, the subscribers.
-shaun
I have had Sirius since day one, love it!
One more thing, my previous vehicle a Mercedes experienced considerable dropouts -- everyday, in places you might not expect like rolling down the middle of an interstate highway out in the open. My new car a BMW has the exact same problem, which tells me it's the infrastructure not the equipment in my cars.
Sirisu-XM should fix these issues if they intend to keep the existing subscriber base and eventually add more subscribers. Otherwise many of us will end up with equipment that no longer plays any content and we'll be back to the days of commercial driven AM and FM radio.
PS: If you are on Facebook, I encourage you to join the group "Boycott Sirius XM Rate Increase"
I'm sure, if you did have the service, they would have gave you ample time to resubscribe at a better rate before March 31st.? They did to me.
My iPod and my Blackberry provide all the music I need. I will not shed a tear if satellite radio dies. Good riddence to bad rubbish.
And I will send an email once again to Sirius XM letting them know they lost a customer.
Anyone that really enjoys radio knows Sirius Radio is the wave of the future.
Howard Stern more than paid for himself. Almost 20 million listeners can and will attest to this. How many subscribers did Sirius have before him? Under 500,000.
At that time XM was the format that drove the bus. XM failed in signing Stern and failed in business because of this. Now after the merger, the product is growing even at a greater rate than before. How do they do that when terrestrial radio is fading, the country's in the worst recession in history, and the auto industry is on it's back?... I'm waaiting genius...
They do it with quality entertainment such as the "Howard Stern Show"!
...enuff said.
The late 70's were much worse.
If your crying about a $2/mo extra charge, purchase one less Big Mac per month. Get over it...
This service is still the best VALUE in media.
What, with every type of muzac available... at any time,
all for just nickels & dimes a day.
Try getting a deal like that from your cable or dish company.
For Comedy, Talk, News, Finance, the WIDEST PLATFORM for music. Don't deprive yurselves.
1) the music stations on satellite have ZERO commercials. No more BS commercials about "male enhancement" pills, hair removal, and obnoxious auto dealers yelling in my ear. Listening to that crap on FM radio is not free.
2) I travel across the state, and I get the same channel without changing the dial. The signal is the same from my home to my destination across the state. Can FM radio make that claim.
3) The music is not censored. You know what is worse than a random F-bomb in a song? Some cute Walmart sound effect to bleep out the F-bomb. If you cannot handle some salty language, then go to your preacher and confess your sins.
XM allowed its subscribers to lock in their existing low rates, but subscribers had to re-up for 3 years. Yeah, it's a long term commitment but I love my XM - so I did it, rather than be reamed month-to-month with the new rates. Hopefully enough of us loyal customers did this and it will make up for the people ditching their subscriptions. I did agree to pay for XMonline - it's a shame they didn't keep offering it for free, but the price is very minimal, $8.99 per quarter, something like that? No big deal. Plus I do have some close family members like my brother who have my login and have listened without being paying subscribers.
I'll be really sad if xm/sirius bites the dust. FM is such a sad place to listen anymore.
This was seen when the FCC made it a-ok to own every terrestrial radio station in America by one company. Nobody gained by that except Clearchannel either.
As a former terrestrial radio network engineering chief, a career satellite communications engineer and a former owner of three terrestrial radio stations, I would say I have a number of reactions to this story and the above comments.
1. My family has subscriptions to both XM and Sirius Radio. I don't know that I had a personal preference over the years, I enjoyed programming on both. But as an engineer, with an extensive background in audio and microwave engineering, I will say I preferred the audio and satellite signal performance of XM; I was really never happy with the digital compression used by Sirius and the resulting audio quality.
2. As a terrestrial radio station owner, I did not feel I was competing with satellite radio. My stations' programming were all about "local" and I invested a good deal of time and money in covering local/regional news and providing consistant quality programming. Really, as a local broadcaster, my competition was more the local daily newspaper, its newsroom and advertising group.
3. But the above being said, I also knew very well that as far as music programming was concerned, my competition was the personal music player devices, and I would include satellite radio in that group. So, rather than bashing satellite radio programming, much of which was nothing more than an automated MP3 player, I made sure my nitche (local programming) was the very best it could be.
4. The majority of market share decline of major and medium market terrestrial radio is not the result of satellite radio, MP3 players, 200 channels of cable TV or anything else, but instead rests squarely on the shoulders of the mega-corporate station owners, who have cut the local staff and news operations to the point that "local programming" has nothing to offer, and therefore listeners, more ofter than not, turn to their MP3 players and satellite radio to have other choices.
5. Satellite Radio: The dueling battles for the launch and survival of satellite radio is what drove both compaines (XM and Sirius) to do what they felt was best to create subscriber growth and ultimately survive. For those of us who have a pretty good understanding of what it costs to design, build, launch and operate a satellite system, including building spares and replacement spacecraft, it was fairly appearant from the beginning that it was unlikely two satellite radio operators could survive long term. And, it was very clear from the beginning that getting people to "pay" for radio was going to be a steep uphill task.
6. Like many other products available to consumers, there is a subjective "price" the market will bear, and XM and Sirius were allready near that number before the merger. Now as a merged entity, they are not going to be able to cut their losses by raising the price. Raising their price, at least for now is going to drive away those subscribers who were already walking the line of whether the cost was worthwhile and/or will cause people with multiple subscriptions to reduce cost by cutting subscriptions.
See Part 2 for remaining comments....
"The majority of market share decline of major and medium market terrestrial radio is not the result of satellite radio, MP3 players, 200 channels of cable TV or anything else, but instead rests squarely on the shoulders of the mega-corporate station owners, who have cut the local staff and news operations to the point that "local programming" has nothing to offer, and therefore listeners, more ofter than not, turn to their MP3 players and satellite radio to have other choices. "
Thank you for raising this point. MP3's, the Internet, or some lame product from Apple is not killing radio. It is the consolidation of radio under giant media corporations, who then hand out bland generic play lists for the stations. Each station is given an "music genre" to play, and they must stick to the same damn songs over and over. Do any of the classic rock stations realize that Jimi Hendrix recorded more than 3 songs?
I will celebrate the day Clear Channel, COX, PAX and the rest of those media corporations go down in flames. Blame this on the FCC who deregulated radio and let these wolves gobble up local radio stations and take away the local personality of those stations.
- by rcrask May 9, 2009 1:49 PM PDT
- Post Part 2
- Like this Reply to this comment
-
-
- by Johnny_FLA May 10, 2009 6:35 AM PDT
- I think the XM birds are going dark before the Sirius birds...
- Like this
-
Showing 1 of 4 pages (107 Comments)7. Customer service at Sirius Radio was already weak, XM appeared better, but frankly neither was very good for an industry who was in a race for survival. One thing is for sure now, this is the wrong time for the management team to reduce further the quality of their customer and technical support teams.
In summary, it is clear the combined Sirius-XM operation needs to move aggressively to consolidate operations, get costs under control, determine what nitche they want to serve, then start investing the money saved in programming content and customer service, in order to turn around the subscriber defections and create long term growth.
My recommendations would be to:
1. Determine what programming is really going to sell itself; then work on developing that line-up.
2. Move to consolidate satellite operations onto one satellite system. For the sake of the long term stability of the company, to reduce technical-operational complexity and cost, and provide the best possible service to the subscribers, the XM satellite system is the best choice.
3. Figure out how to get the Sirius users moved to the XM satellite system with the least possible disruption, and put together some financing to assist users in this transition.
4. Get the new programming line-up on the XM system this fall, including premium content like Howard Stern. While Howard Stern is no fool, I have little doubt he would agree to a new much less expensive deal, as long as he could participate in the longer term upside. Cut all the junk programming and costs surrounding the Howard Stern program. Get Howard to do his show live five hours a day, 5 days a week, and repeat the show on one single channel the rest of the time.
5. Run the same programming on both satellite systems until March 2010 (allows people time to buy new hardware as Christmas gifts and birthdays, etc.). Allow Sirius subscribers to move to XM easily and very quickly. Shutdown the Sirius terrestrial repeaters at the end of 2009 to move people along, and shut diwn Sirius satellite operations on March 31, 2010. Allow only XM system users to access Internet programming at no cost, again prompting people to move to the XM system. Give people a financial incentive to keep ALL of their subscriptions active through December 31, 2010.
6. Decide whether Sirius-XM is going to operate from New York or Washington, DC, and start the full consolidation asap, and get it done by this September.
7. Look at other high profit revenue streams that could be combined into the XM digital transmission system.
8. Look to leverage the old Sirius satellite system by either selling it to a data provider, or by creating a partnership with a data-broadcasting partner to use it as a mobile/portable data network. There are a number of potential applications that could generate revenue for this extra system. If, as it turns out, these other applications are not financially productive and/or the Sirius satellite satellite system is in need of near term satellite replacements, then just shut it down and move on.
Finally, Sirius-XM will not survive even in a consolidated mode if there is not an effective, productive and focused operating-management team. The operating-management team needs to grow the business and make "long term" decisions. The public-company team needs to raise capital for the new group and keep their hands off the operation. There is no question Sirius-XM is in trouble and may even be on life support at this point, but a dedicated management team with a long term view has a reasonable probability of making Sirius-XM a real busienss, as long as there is focus on the operating company, and not creating "transactions." And, even if the management team can stop the defections and create subscriber growth, it is going to be touch and go for some time to come, so survival is really going to depend on good-quick decisions by an effective "small" management team, and focus, focus, focus.
That's the view from here....
Dr. Raymond C. Rask
rcrask@awti.info