Sirius: Lower Price Plan With XM Buy

Sirius Satellite Radio Incorporated has announced that its customers would get the option to pay below the current $12.95 per month subscription fee for just the channels they want, if the company's plan to buy XM Satellite Radio Holdings Incorporated goes through. The Sirius filing said the deal would generate cost savings that could allow the company to offer "à la carte" programming. Combined, Sirius and XM currently offer more than 300 channels of programming, although many are identical or very similar. Sirius also said the combination would increase the diversity of programming by eliminating redundancy that would free channel space for additional channels. "Customers may elect to receive fewer channels at a monthly price lower than $12.95; substantially similar programming at the existing $12.95 price; or more channels, including some of the 'best of both' networks, at a modest premium to the cost of one service," Sirius said in the Securities and Exchange Commission document.

Sirius CEO Mel Karmazin appeared at a Senate subcommittee hearing to face questions regarding competition, if Sirius were to buy XM. During the hearing, Senator Herb Kohl, questioned Karmazin's stance that the combined company would face competition from terrestrial radio, MP3 players and Internet radio. Kohl also voiced concern that the combined company would raise prices in the future, particularly if it signed exclusive contracts with sports leagues or popular entertainment providers. Karmazin said he was open to regulatory oversight of price increases as a condition of the merger. Karmazin also told the panel that subscribers would be able to block programming they find offensive if the government approves the deal.

News source: Physorg

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