Come New Year’s Day it will be a little more expensive to listen to satellite radio. With its lawsuit settlement freezing prices due to run out the end of 2011, SiriusXM has announced a price hike for 2012.
“In the 10 years since SiriusXM launched service, we have expanded our programming line-up to provide an unparalleled listening experience. On January 1, 2012, we will increase the base price of Sirius and XM Select from $12.95 to $14.49 per month and will adjust prices on many of our other programming packages,” CEO Mel Karmazin announced Wednesday. “This is the first price increase on our basic service packages since the addition of the NFL, NASCAR, Howard Stern, Martha Stewart and many college sports to our programming line-up. Through continued investments in technology, the best and most diverse programming in radio is available to our subscribers in cars, homes, offices, business establishments, on the Internet and smartphones. We will expand our programming and technology further with the launch of SiriusXM 2.0 in the coming months,” added Karmazin.
With the price hike, SiriusXM affirmed its guidance for 2011 and – incorporating the price hike – told Wall Street what to expect in 2012.
SiriusXM is projecting that revenue will grow approximately 10% in 2012 to $3.3 billion. Adjusted EBITDA is expected to increase 20% to around $860 million. And free cash flow is expected to soar – jumping 75% to $700 million.
“Our new guidance for 2012 demonstrates our expectation of robust growth next year. SiriusXM’s outstanding financial performance in the midst of considerable economic uncertainty will continue in 2012 as we grow our subscriber base and free cash flow and anticipate that our revenue and adjusted EBITDA growth will accelerate,” said Karmazin.
SiriusXM shares jumped Wednesday afternoon following the announcement, moving from up slightly to a gain of more than 6% in trading. The stock closed Wednesday (9/14) at $1.80, up 6.8% for the day.
RBR-TVBR observation: Shhh, don’t tell anyone. The subscription price is just a target. You can get the service for a lot less if you threaten to cancel.