Digital Radio Central - Sponsored by TSS Radio
  DRC Home Page DRC Forums Contact Us  
 
SIRIUS Backstage Forum
 
 
 
  Sirius Satellite Radio XM Satellite Radio iTunes/iPod Slacker Pandora  
 
 
FAQ Members List Calendar Search Today's Posts Mark Forums Read  
Go Back   SIRIUS Backstage Forum > >
Visit Digital Radio Central

Notices

The Street Converse with other investors about finance, economic and investment strategies. This is also the place to discuss SIRIUS XM company news and your favorite stocks.

 
 
Thread Tools Display Modes
 
 
Old 12-22-2006, 06:34 PM   #1
Whiskerbiscuit
Banned
 
Join Date: Sep 08, 2006
Posts: 234
Whiskerbiscuit is on a distinguished road
Default Sirius could triangulate XM with pricing.

I've felt for a long time that Sirius's deep exclusive content is not reaping it's potential. Sure, it's dominating XM at retail, and will drive advertising greatly, but per subscriber, it's not producing any great revenue per subscriber advantage ... today anyway.

What IF Sirius adopted a two tier strategy of pricing. Wouldn't that put XM in an awfully frightful position. Play along.

IF Sirius cut basic service to say 11.50 per month and had 50% of the subs remain on that plan, while offering complete sports, Nascar and Martha for say 15.99 per month which 45% of subs accepted, 5% could discontinue their subscriptions completely without Sirius losing a dime in revenue. ( This is a mathematical example that would need to be supported with heavy research obviously )

What does this do to XM ?

First, since they have no outstanding premium content ( sans O and Baseball ) they would be hard pressed to offer a premium format. This was demonstrated when they tried to split ONA out for 2.00 per month and only had 35K takers underscoring why ONA and now the Virus was syndicated to TERRAD. A very limited asset value.

This then leaves XM in the precarious position of either trying to justify their 12.99 price OR lower their price, which would screw them into the ground.

One thing for sure, as sales and marketing go, monthly subscription rates are a Rook to be played. If it's next month or two years from now, we will sooner or later see this chess game moved into tier pricing.

Merry Christmas all.

Last edited by Whiskerbiscuit; 12-22-2006 at 06:37 PM..
Whiskerbiscuit is offline  
 
 
Old 12-22-2006, 10:14 PM   #2
loadfet17
Sirius Star
 
loadfet17's Avatar
 
Join Date: Mar 13, 2006
Location: Pennsylvania
Posts: 1,256
loadfet17 is on a distinguished road
Default

Where does Howard fall into the equation? The two main reasons I subscribe to Sirius is Howard and the NFL. The music is decent, but the repetition sucks.
__________________
Friday and Saturday nights, I'll probably be at:

www.williamsgrove.com

or

www.newegyptspeedway.net
loadfet17 is offline  
 
 
Old 12-22-2006, 10:23 PM   #3
roger2001
Mixologist
 
Join Date: Aug 11, 2005
Location: Lansdale, PA
Posts: 310
roger2001 is on a distinguished road
Default

First of all, XM has tested the waters with this by at the beginning adding O&A with an added fee per month. That obviously didnt work out well.

Another problem I see with this peticular plan is that in the basic plan, it seems all you really have is the commercial free music. Then what you want to do is have people pay extra for advertiser supported channels. That would ruin the advertiser support for Sirius.

With some retooling, this idea might work, although I would not go for it personally.
roger2001 is offline  
 
 
Old 12-23-2006, 02:44 AM   #4
Whiskerbiscuit
Banned
 
Join Date: Sep 08, 2006
Posts: 234
Whiskerbiscuit is on a distinguished road
Default

Quote:
Originally Posted by roger2001
First of all, XM has tested the waters with this by at the beginning adding O&A with an added fee per month. That obviously didn't work out well.

Another problem I see with this particular plan is that in the basic plan, it seems all you really have is the commercial free music. Then what you want to do is have people pay extra for advertiser supported channels. That would ruin the advertiser support for Sirius.

With some retooling, this idea might work, although I would not go for it personally.
Valid points, and I get your drift, but there seems to be something for SATRAD to learn from Cable, Satellite TV, and Telecommunication based business models which do employ tier pricing. Satrad seems to stand alone with the one-for-all position, and I'm wondering why what's good for the goose, isn't good for the gander ?

If there's any validity for the model, it seems to be a better tool for Sirius than for XM.
Whiskerbiscuit is offline  
 
 
Old 12-23-2006, 07:34 AM   #5
hieian
Banned
 
Join Date: Sep 06, 2006
Posts: 103
hieian is on a distinguished road
Default

The best way to do it is to have one reduced price for all subscriptions. If people want to listen to music only, offer a free subscription. If people want other stuff in addition to music, charge 6.00 per month just like the same price for a Netflix account. At that price, it would force XM to reduce their price for subscription and push hard to get more interesting content along with getting more subscribers to switch from XM to Sirius.
hieian is offline  
 
 
Old 12-23-2006, 07:38 AM   #6
firsttimer
Loyal Listener
 
Join Date: Mar 22, 2005
Posts: 238
firsttimer is on a distinguished road
Default

The reality is that Sirius is at the point where a price increase is more likely.
firsttimer is offline  
 
 
Old 12-23-2006, 09:43 AM   #7
River_King
Mixologist
 
Join Date: Nov 25, 2005
Posts: 265
River_King is on a distinguished road
Default

Quote:
Originally Posted by hieian
The best way to do it is to have one reduced price for all subscriptions. If people want to listen to music only, offer a free subscription. If people want other stuff in addition to music, charge 6.00 per month just like the same price for a Netflix account. At that price, it would force XM to reduce their price for subscription and push hard to get more interesting content along with getting more subscribers to switch from XM to Sirius.
Free commercial free music...how do you make money?
$6.00 for everything else...Sat radio isn't making money at current pricing, cutting it in half???????????????????????????????? Too much egg nog.
River_King is offline  
 
 
Old 12-23-2006, 10:00 AM   #8
roger2001
Mixologist
 
Join Date: Aug 11, 2005
Location: Lansdale, PA
Posts: 310
roger2001 is on a distinguished road
Default

Quote:
Originally Posted by Whiskerbiscuit
If there's any validity for the model, it seems to be a better tool for Sirius than for XM.
Ill agree with that. The major thing that XM could use would be the MLB, and that would be a tough sell too.
roger2001 is offline  
 
 
Old 12-23-2006, 03:25 PM   #9
TSS Taylor
Top Dog Member
Sirius could triangulate XM with pricing.
 
TSS Taylor's Avatar
 
Join Date: Feb 25, 2005
Location: Chicago, IL
Posts: 1,880
TSS Taylor will become famous soon enoughTSS Taylor will become famous soon enough
Default

I don't know how SIRIUS or XM can survive at $12.95 per month.

So many subscribers are spending hours on the phone with customer service. Even if those reps got $6 an hour it only takes two hours on the phone before it's not profitable.

Somehow I think the price needs to go up a bit. For both. I think they could also lower the price of radios but raise the monthly fee.
__________________
DRC
TSS Taylor is offline  
 
 
Old 12-23-2006, 04:55 PM   #10
SISO
Sirius Star
 
SISO's Avatar
 
Join Date: Sep 20, 2004
Location: East Tennessee
Posts: 7,591
SISO will become famous soon enoughSISO will become famous soon enough
Send a message via AIM to SISO Send a message via MSN to SISO Send a message via Yahoo to SISO
Default

Quote:
Originally Posted by paintedantenna
I don't know how SIRIUS or XM can survive at $12.95 per month.

So many subscribers are spending hours on the phone with customer service. Even if those reps got $6 an hour it only takes two hours on the phone before it's not profitable.

Somehow I think the price needs to go up a bit. For both. I think they could also lower the price of radios but raise the monthly fee.
Yep, I'd place money on the price going up the first half of next year.
SISO is offline  
 
 
Old 12-23-2006, 05:23 PM   #11
DAB
Site Editor / Moderator
Sirius could triangulate XM with pricing.
 
DAB's Avatar
 
Join Date: Jan 08, 2003
Location: Louisiana
Posts: 20,013
DAB has a spectacular aura aboutDAB has a spectacular aura aboutDAB has a spectacular aura about
Default

Quote:
Originally Posted by paintedantenna
I don't know how SIRIUS or XM can survive at $12.95 per month.
If they were smart, XM and SIRIUS would get together and initiate a price increase at the same time. My suggestion would be $14.95 for primary subscription and $7.99 for secondary subscriptions.

It is my personal feeling that if you go much over $15.00 per month folks will begin to drop subscriptions. Some may would go as high as $15.95 per month, but that would be a tough sell.
__________________
DAB

Digital Radio Central (New Forum) http://www.digitalradiocentral.com/forum.php

Slacker G2 Premium (4gb-25 Stations), Home Dock
Delphi XpressRC with 2 Home, 2 Car Docks and XMBB1 Boombox
1st Gen, iPod Touch 32gb (Slacker and Pandora Apps) iKicker Boombox
DAB is offline  
 
 
Old 12-23-2006, 06:28 PM   #12
hieian
Banned
 
Join Date: Sep 06, 2006
Posts: 103
hieian is on a distinguished road
Default

Quote:
Originally Posted by River_King
Free commercial free music...how do you make money?
$6.00 for everything else...Sat radio isn't making money at current pricing, cutting it in half???????????????????????????????? Too much egg nog.
The music is already on the computerized mp3 player at the studio and you don't get your choice of songs like every other mp3 player that you set up yourself. So it would be better to charge for all of the other stuff at half the current subscription price to draw in more people to get a Sirius satellite radio subscription. For the current subscription price, I could get a monthly subscription to Netflix and GameTap combined since I already have the stuff available to use those services.
hieian is offline  
 
 
Old 12-23-2006, 06:53 PM   #13
Whiskerbiscuit
Banned
 
Join Date: Sep 08, 2006
Posts: 234
Whiskerbiscuit is on a distinguished road
Default

Quote:
Originally Posted by DAB
If they were smart, XM and SIRIUS would get together and initiate a price increase at the same time. My suggestion would be $14.95 for primary subscription and $7.99 for secondary subscriptions.

It is my personal feeling that if you go much over $15.00 per month folks will begin to drop subscriptions. Some may would go as high as $15.95 per month, but that would be a tough sell.
You're kidding aren't you ?

That would be " price fixing " which is highly, highly illegal. Having been in this position, I can tell you that competitors ( at least smart ones ) don't have ANY conversations one on one, and certainly wouldn't have any conversations related to format or pricing for that reason. While Panero may be getting a hack saw in a cake someday for his sale of 11 million bucks in December of 2005, even he's not that stupid.

The problem with a price increase is that you're never sure IF your competitor will follow, and it's disastrous if he doesn't. Also you have to make sure that the shake out ( loss ) is not greater than the pricing impact or it's all for less than nothing.

This ( Pricing and tiering ) isn't easy when both are walking market share tightropes. Whatever is done will be done, if it's done at all, with 1/2-1.0 million bucks of research, I can tell you that.
Whiskerbiscuit is offline  
 
 
Old 12-23-2006, 06:55 PM   #14
Whiskerbiscuit
Banned
 
Join Date: Sep 08, 2006
Posts: 234
Whiskerbiscuit is on a distinguished road
Default

Quote:
Originally Posted by SISO
Yep, I'd place money on the price going up the first half of next year.
If it happens, both stocks will rally 20% typically.
Whiskerbiscuit is offline  
 
 
Old 12-23-2006, 09:02 PM   #15
DAB
Site Editor / Moderator
Sirius could triangulate XM with pricing.
 
DAB's Avatar
 
Join Date: Jan 08, 2003
Location: Louisiana
Posts: 20,013
DAB has a spectacular aura aboutDAB has a spectacular aura aboutDAB has a spectacular aura about
Default

Quote:
Originally Posted by Whiskerbiscuit
You're kidding aren't you ?

That would be " price fixing " which is highly, highly illegal.

This ( Pricing and tiering ) isn't easy when both are walking market share tightropes. Whatever is done will be done, if it's done at all, with 1/2-1.0 million bucks of research, I can tell you that.
Well of course I was kidding... You must think I am crazy. LOL

Then again the both ignored the FCC guidelines of FM Transmitters too, which caused them both a good bit of hassle recently.

But you are correct the danger in raising your price is that if your competitor doesn't you are screwed. Then again we've been there before when XM was $9.99 and Sirius was $12.95. Not sure either could handle that type of price difference today.
__________________
DAB

Digital Radio Central (New Forum) http://www.digitalradiocentral.com/forum.php

Slacker G2 Premium (4gb-25 Stations), Home Dock
Delphi XpressRC with 2 Home, 2 Car Docks and XMBB1 Boombox
1st Gen, iPod Touch 32gb (Slacker and Pandora Apps) iKicker Boombox
DAB is offline  
 
 
 

Go Back   SIRIUS Backstage Forum > >


Digitalradiocentral.com




Similar Threads
Thread Thread Starter Forum Replies Last Post
Sirius Customer ( NO ) Care: Don't Lose Your USB Cable sracer5 SIRIUS S50 21 09-22-2006 08:58 PM
XM Canada fumbles the ball...Sirius gets the CFL perogy SIRIUS Canada 1 04-24-2006 07:08 PM
XM Vs. SIRIUS: Country Phil53188 SIRIUS Country 24 08-06-2004 04:57 AM
SIRIUS Satellite Radio Begins Shipping 'ORBITER' KTMC Radios & Receivers 18 07-01-2004 03:07 PM
Sirius and XM Radio Poll TX WJ SIRIUS Dogstar Cafe 34 11-12-2003 11:26 PM

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 02:26 PM.
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2020, vBulletin Solutions Inc.
Search Engine Optimisation provided by DragonByte SEO v2.0.39 (Pro) - vBulletin Mods & Addons Copyright © 2020 DragonByte Technologies Ltd.
All Content Copyright SIRIUS Backstage. All Rights Reserved. SIRIUS and registered trademarks are the property of SIRIUS Satellite Radio, Inc. The opinions posted on SIRIUS Backstage website and forums are those of the individual posters and/or this website and are not necessarily the opinions or positions of SIRIUS Satellite Radio, Inc.