Satellite Radio subscriber rate tap-dance
There’s some significant wordsmithery going in in Mel Karamzin’s arguments before Congress that satellite radio rates would not rise once a merger between Sirius and XM is consummated.
Some folks would pay less for fewer services while the most folks would pay would be double if they elected to get the programming in its entirety from both XM and Sirius. In other words, some would pay less, some would pay more. But some could pay less!
Now anyone who has ever subscribed to cable TV knows full well that when you dissect the elements from the whole the most magnetic and attractive combinations of services invariably cost more than whatever the “base” is deemed to be.
So, as I predicted previously, the average rate paid by a subscriber – averaging the highs and lows – will likely rise by two to three dollars per sub.
It is, after all the specialized niche components which create much of the value of satellite radio to the average subscriber. And those might very well cost extra.
Now, is this an argument why Sirius and XM should not merge?
If three days worth of Starbucks latte’s cost you ten bucks, then what’s the value of a month of Nascar? Or of Oprah Winfrey? Or of Howard Stern? Especially since you don’t have to wait in line for a barista to make them.
Satellite radio is a terrific bargain. Let’s not kid ourselves.
And there’s one bargain even greater: The radio that comes to you for free in your home, at work, and in your car.