If you love your Sirius XM, then you probably love music just as much.
Which means you have lots of options at your fingertips, most of them free. Sure, Sirius curates the chaos, but do you need that curation, especially when it’s not your only hangout? Can you live without your Stern, your MLB, your Shade 45?
Well, Sirius is about to test its listener loyalty like never before. And if you don’t think these are fragile consumer relationships, just ask Netflix. They never imagined losing 800,000 subscribers (and counting). And in this economic climate, who knows how things will go down for Sirius come January 1st. “We’re very cautious when we’re raising our price,” Sirius chairman Mel Karmazin assured investors on Tuesday morning. “We believe that we are being prudent.”
It all looks so safe on paper, it’s so deceptively modest. The baseline monthly price of $12.95 will get moved to $14.49 come 2012 (amongst other package changes), and Karmazin highlighted a mere $1.50 bump. Or, “5 cents a day,” perhaps the most devilish and misleading type of division in media subscription.
And maybe that’s the problem! The psychological issues were what Netflix CEO Reed Hastings so famously missed, and Sirius is suddenly hurtling towards the $15 orbit, and out the $10 orbit. “Everyone saw what happened to Netflix,” Maxim Group analyst John Tinker told Reuters.
Meanwhile, Sirius is performing ‘okay’ in the current, pre-hike period, though analysts are clearly worried. During the third quarter, the company added 334,000 subscribers, lower than expectations but enough to lift the cumulative to 21.3 million (as of September 30th). It’s a lot to lose…