Sirius XM’ reported its strongest subscriber growth in Q1 in three years due to brisk auto sales. Net subscribers rose by 373,064 in the quarter, up 118 percent over last year’s first quarter. Total subscribers hit a new high of 20.6 million.
On Tuesday, CEO Mel Karmazin also confirmed that the company may raise rates. Its agreement with the FCC to keep prices steady expires in July and if the FCC gives the final nod, then Sirius XM will raise prices beyond the current $12.95 basic fee, which has remained the same for 12 years. Karmazin said the hike would be higher than the rate of inflation. “You should assume it would not be something that looks like inflation. But it would be something that would compensate the company for its investment in content,” he said.
On the retail end, about 6.7 million of the 20 + million subscribers were from the retail sector but the company is losing net new retail subscribers at a rate of about 200,000 per quarter, it said on a conference call today with analysts.
Karmazin also confirmed that satellite radio 2.0 will be introduced by the end of the year. It will come to the retail sector first, and later to the OEM sector. It will let listeners buy music from the radio and will include more channels, especially Hispanic channels. It will also offer an electronic program guide, and DVR function.
Sirius XM said it may be interested in purchasing another company down the road, but it had no specific company in mind, and might also decide instead, to buy back stock.
Sirius XM submitted an application to raise its fees to the FCC in January.
For Sirius XM’s quarterly results click here.
Source: Sirius XM