The Sky’s Now The Limit For Satellite Radio … Prices - Twice

The Sky’s Now The Limit For Satellite Radio … Prices

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Finally.

After months of sitting around waiting and copy editing endless variations on “XM/Sirius Still Optimistic About Merger” stories, the Department of Justice’s approval of the proposed deal proved anti-climactic for most of us TWICE editors. And now that everyone expects the FCC to follow suit and it looks like its pretty much a done deal, we can move on to coverage of post-merger stories of actual substance.

As a very satisfied XM customer though, the real wait is just beginning for me. I’m waiting for the price of my subscription to go up.

Yes, I have read the Justice Department’s statement on the deal, which concluded:

“The evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons …”

Excuse me if I’m skeptical.

I’ll allow that the efficiencies of merging two similar companies will likely bring the entry-level subscription price down at first. And the companies’ promises of “a la carte” pricing will allow most subscribers to fine tune what channels they’re receiving and eliminate some which they were paying for, but not listening to. I also assume (um, hope?) the legislators who have been poring over the details of the deal will remain vigilant about anti-trust behavior by the post-merger company.

That being said, I suspect that eventually the price of my subscription will go up for the very reason I subscribed to XM in the first place: Major League Baseball games.

XM’s broadcast of “every game, every team” sucked me right in when it was announced. Living in the New York market but rooting for the Philadelphia Phillies — excuse me, the National League East Champion Philadelphia Phillies — was a real hardship for a baseball nut like me. I love baseball on the radio, being of a certain age, and not only hearing Phillies games but hearing the legendary Phils announcer Harry Kalas call the home games was a bargain for me at $13 a month. Getting more than 100 channels of commercial-free music on top of it was a bonus, a huge one at that, and one I would have trouble living without now that I’ve lived with such choice for so long.

But if there’s one thing every sports fan knows, it’s this: We are not rational in our fandom, and the cable companies, satellite TV companies and professional sports franchises have mastered the art of exploiting that irrational fandom into profits.

The familiar argument popularized by the cable companies in their endless carriage battles with start-up regional sports networks went like this: Only a small percentage of subscribers actually want access to sports broadcasts, so why should basic cable subscribers have to pay for them? Premium tiered pricing levels for cable and satellite TV subscriptions became the norm and the providers learned quickly that sports fans will pay more for sports broadcasts than they ever imagined — in the case of packages like MLB Extra Innings and NFL Sunday Ticket, several hundred dollars.

XM and Sirius have modeled their businesses after the TV service providers, and so it is impossible not to expect similar arguments being made, and similar tiered pricing levels aimed at sports fans, rolling out sooner rather than later. And you can be certain that there will not be a choice of subscribing to just MLB games, or any of the other professional sports leagues united under the XM/Sirius banner, and not the basic service.

A
 smart person, a rational one, should at that point say, “Screw ‘em, I’m not paying a dollar more,” and cancel his subscription. But the irrational person, the one in the mirror, the one who remains loyal to the losingest franchise in professional sports history (NL East Champions notwithstanding) will inevitably end up paying the premium. Irrational? Yes. That’s exactly what XM/Sirius is, no doubt, counting on.

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