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Sirius CEO says price could rise
Mel Karmazin won't rule out a price increase in wake of rival XM's hiked monthly subscription fee.
March 2, 2005: 9:39 AM EST

NEW YORK (CNN/Money) - Sirius Satellite Radio is not ruling out a price increase for its basic subscription service in light of its arch rival's fee hike announced earlier this week, CEO Mel Karmazin told analysts Wednesday.

Karmazin, who spoke at a Bear Stearns media conference in Florida, said XM Satellite Radio's announcement Monday that it would raise in early April its basic monthly subscription fee by 30 percent, to $12.95 a month, "opens up all kinds of options" for Sirius.

Until now, Sirius (Research), while smaller than XM with just more than 1 million subscribers, has been the more expensive of the two dueling services. The move by XM, (Research) with 3.2 million subscribers, brings the cost of a basic plan on par with the $12.95 fee that Sirius already charges.

Karmazin, the former No. 2 at media giant Viacom who took over as Sirius CEO late last year, said XM's fee increase gives Sirius the option of raising its basic price, although he emphasized that no decision has been made.

"I think it will be great," said Karmazin, referring to XM's cost boost. "I can't think of anything better for us."

Should Sirius decide to keep its basic price at current levels, Karmazin boasted that it would give Sirius a competitive advantage. Karmazin acknowledged that the Sirius technology currently lags behind XM, but said he thinks his company offers better entertainment.

Sirius has shelled out hundreds of millions of dollars in programming costs to secure exclusive rights to shock jock Howard Stern, National Football League games, and Nascar auto races.

XM has also been aggressive about building content. It has the rights to Major League Baseball as well as known radio personalities like Gregg "Opie" Hughes and Anthony Cumia, hosts of the ribald "Opie & Anthony" show.

Karmazin said Wednesday that he thinks there's plenty of opportunity for both Sirius and XM to thrive and called the satellite radio market a "duopoly" akin to the dominance that Coca-Cola and Pepsi enjoy in the soda industry.  Top of page


Sirius Satellite Radio Incorporated
XM Satellite Radio Holdings Incorporated
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