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Sheer, astonishingly unmitigated chutzpah

Posted on: 07/27/2009

Perhaps you read in the trade press today about a bit of a controversy over Sirius XM raising their monthly subscription rate due to an increase in the SoundExchange royalty obligation.

In fact, it’s much worse than you read. In fact, I’d call it sheer baldface astonishing behavior!

On the Sirius XM website, in the FAQ, there’s the question, “Is this fee consistent with Sirius XM’s merger commitment not to raise prices for three years?”

The response is: “Yes. This fee is consistent with our commitment not to raise the base price of specific service plans for three years after the merger. The FCC decision approving the merger between Sirius and XM permits the companies beginning July 29, 2009, to pass through to subscribers any increases in music royalties since March 20, 2007, the day the companies first asked the FCC to approve the merger. The U.S. Music Royalty Fee implements this FCC decision.”

Okay, sounds fine. Except that their SX rate goes up from 6% to 6.5% (about an 8.3% increase), but they’re raising prices by $1.98 (about a 15% increase). So people are complaining. But still, it’s in the ballpark.

But here’s the real story: Their SX increase is going up by .5% of a $12.95 monthly subscription price — or about 6.5 cents. But they’re planning to raise prices by $1.98.

Can they get away with it? Well, the merger’s done. What’s the government going to do — rewind it?

Sheer unmitigated chutzpah.



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Comment

  1. This is a no brainer for me…when my free trail runs out I let the service go. I don’t buy things that are overprocessed and boring

    George Brand · Jul 27, 08:33 AM · #

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