SiriusXM to increase subscriber rates over music royalty fee

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The pre-merger logo for SiriusXM Satellite Radio.

The pre-merger logo for SiriusXM Satellite Radio.

SiriusXM will hike the cost of subscription rates by nearly a dollar for most packages starting early next year, according to a notice sent to customers in the mail.

Starting January 5, subscribers of SiriusXM’s top package, known as “All Access” will pay an additional $2.64 in music royalty fees on top of the base subscriber cost of $18.99 a month, an increase from the current rate of $1.87 a month. Other music packages, including the company’s “Premiere,” “Select” and “A-la-carte” offerings, will see a nominal rate increase of between 50 and 75 cents per month.

For the first time, the music royalty fee will also be passed along to standalone SiriusXM Internet Radio subscribers. Currently, internet-only customers pay $14.99 per month for most of SiriusXM’s channels plus premium content from Howard Stern and others. Starting in January, an additional fee of $2.08 will be tacked on to the monthly bills of internet-only customers, bringing the total cost to a little over $17 per month.

SiriusXM began passing along the cost of music royalties to subscribers in 2009 shortly after the merger of the two satellite radio companies. The royalty fee resulted in a de facto rate increase, despite an agreement with federal regulators that it would not raise subscription costs as a condition of the merger.

The royalty fee increases for some of SiriusXM’s more-popular packages appear below:

SiriusXM
Package
Current
Fee
Royalty Fee
after January 5, 2015
Additional Lines
after January 5, 2015
Select$1.87 / month$2.08 / month$1.39 / month
Premiere$1.87 / month$2.64 / month$1.94 / month
All Access$1.87 / month$2.64 / month$1.94 / month
Internet-OnlyNo fee$2.08 / month$1.39 / month
Linked InternetNo fee$0.56 / month$0.56 / month
Mostly Music$1.25 / month$1.39 / monthNo additional fee
A-la-carte
(with Howard Stern)
$1.00 / month
($1.00 / month)
$1.11 / month
($1.94 / month)
No additional fee
(No additional fee)
Español$0.75 / month$0.83 / monthNo additional fee
Basic$0.75 / month$0.83 / monthNo additional fee

SiriusXM explains the royalty fee is used to fund artists and composers who hold the rights to various musical works that are broadcast by the service. The company notes that the fee helps pay copyright holders for the redistribution of their work on satellite radio in contrast to traditional radio which does not have to pay a similar fee.

SiriusXM has 22 million paying subscribers, according to its most-recent quarterly report. Subscription growth for the satellite radio company boomed when the service formerly known as Sirius Satellite Radio signed Howard Stern to a lucrative multi-year deal in 2005. Absent a renewal, Stern will leave the company at the end of his current contract next year.

For the full royalty fee increase, click here.