Sirius XM Radio Inc Complete Deal
With this week’s news that the FCC had given its blessing to the XM Radio/Sirius Radio merger, the two companies wasted little time in completing the long awaited deal. The merger was completed this week, creating a new entity, known as Sirius XM Radio Inc., which will continue to trade using Sirius Radio’s “SIRI” ticker. The company has indicated that they expect the merger will net them an expected $400 million savings in 2009 as they will no longer need to inter-compete.
The company has indicated that current subscribers will still be able to continue to receive their programming using their existing equipment and will retain their current programming package, however new dual service equipment will be available in the near future allowing customers a broader range of choice and flexibility in programming. "The company is expected to offer “à la carte” pricing and programming within 3 months, as well as the introduction of a dual service radio within that same time frame. This will allow subscribers who only listen to a limited or small number of channels to save on programming costs, which as expected to begin at $6.99 per month. In addition, they will set aside 8 percent of their available channels for public and minority programming and also have agreed to a 3 year freeze on programming prices.
Sirius XM Radio Inc., which now has a combined subscriber base of 18.5 million, will continue to be led by Sirius Chief Executive Mel Karmazin. A Sirius XM Radio Inc. announcement detailed the following; “As a result of the merger, SIRIUS XM Radio will also be able to offer consumers new packages in audio entertainment, including the first-ever a la carte programming option in subscription media. In addition to two a la carte options, the new packages will include: “Best of Both,” giving subscribers the option to access certain programming from the other network; discounted Family Friendly packages; and tailored packages including “Mostly Music” and “News, Talk and Sports.” The first of the new packages will be available in the early Fall.”
Initially, there will be 2 “à la carte” options available for those that choose to upgrade their satellite radio equipment to a dual service radio;
For $6.99 per month, Sirius subscribers will allow you to choose 50 channels from an available 100 channels now currently available on the Sirius service. XM subscribers will be able to choose 50 channels from an available 100 on XM.
The other option, for $14.99 a month, will allow you to pick 100 channels, with Sirius customers able to select from a company-determined "best of" XM's channels, and XM customers allowed to select from the "best of" Sirius channels.
Existing customers who do not wish to upgrade their equipment will also be given more flexibility, including a $9.99 per month option for a “mostly music” package, or a “mostly news, sports and talk” package for the same price. Another $16.99 per month package will allow current subscribers to receive all their current programming in addition to a limited “best of” selection of channels from the other service. Finally, there will also be a “family friendly” package available from both services for $11.99 per month which will exclude channels with explicit language or content.
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