NEW YORK (Reuters) - Sirius XM Radio Inc plans to increase prices for subscribers with multiple accounts and begin to charge for its online music feed, moves that may help the pay-radio service meet looming debt payments.
While it is keeping its core rates unchanged — a condition to which Sirius and XM Satellite Radio agreed last year in order to close their merger — the move could also anger subscribers still raw from a series of programing changes enacted in November.
Starting March 11, users with more than one account will pay about $9 for additional accounts, up from about $7, a customer service representative for the New York-based company said Wednesday.
Also, subscribers will have to pay about $3 a month for the online version of the service. Currently, it is free for subscribers.
Users will be able to defer the increases if they sign up for a long-term annual contract extension, or pay up to $500 for a lifetime subscription, representatives said. They added that there is no plan to change the standard monthly subscription price.
An official spokesman for Sirius, one of the largest U.S. subscription services with about 19 million subscribers, did not return calls for comment.
Sirius agreed with the U.S. Federal Communications Commission to not raise for three years the retail prices on its basic $13 per month subscription package, and other programing packages such as a la carte; “best of both”; its news, sports, and talk package; and a discounted family-friendly programing package.
Increased revenue derived from the new charges and long-term commitments would come at a crucial time for Sirius XM, which entered the year with about $1 billion in debt due to mature in 2009.
According to Standard & Poor’s, Sirius has $175 million of convertible notes maturing next month, $350 million of secured bank debt due May 2009, and $433 million in convertible notes due December 2009.
Last month, Sirius Chief Executive Mel Karmazin said that while the tight credit market has made it difficult to get optimal terms, he is confident the company can refinance the debt. He also forecast double-digit revenue growth for Sirius in the fourth quarter.
Shareholders may not be as optimistic. Sirius shares fell 4.27 percent to 10.5 cents at mid-afternoon, down 8 percent this month and off 95 percent in the past six months.
Reporting by Franklin Paul; editing by Gerald E. McCormick, Richard Chang