Now that's what I'm talking about.
Shares of Sirius XM Radio
SiriusBuzz broke the news that the monthly rates on additional subscriptions and online streaming -- essentially the two plans that aren't governed by the FCC-mandated rate freezes as a condition for the merger's approval -- are going up on March 11.
Wake up, investors. This is hopefully the first step of many by Sirius XM to -- ideally -- bump up its share price, to the point where it can better raise the money it needs to fend off nail-biting creditors.
Why am I the only one in this cheesy cheerleading outfit? These pom-poms are rented, you know.
Pump up the jam
The company's Internet streaming service will get a long-needed bump in audio quality, but it will no longer be free for existing subscribers. Users will have to pay an additional $2.99 a month for access. In addition, members who are already paying $12.95 a month for their service will now have to pay $8.99 -- a $2 monthly increase -- for additional receivers within the same account.
The beauty of the jacked-up plans isn't necessarily the new rates. The timing is actually a bit unfortunate, given the state of the economy. One can argue that if roughly a quarter of the accounts decide to dump their secondary subscriptions altogether instead of caving in to the 29% hike, that it will be a pointless move.
Few users are likely to pony up for online streaming, despite the improved bit rate. There are just too many free Web alternatives like Pandora, Slacker, Time Warner's
However, what a looming rate hike will do is inspire subscribers to either upgrade to lifetime subscriptions or prepay for years of future service to lock into the old rates. As long as they have the means -- and let's face it, this is a real issue right now -- listeners may be sending a lot of money Sirius XM's way over the next few weeks.
Jam up the pump
The moves won't do wonders for the income statement, since the capital infusion isn't booked as immediate revenue. However, it will fatten up the company's balance sheet at a time when it has some serious refinancing hurdles to clear.
The move may also lead to a pickup in retail activity. Sirius XM is growing nicely on the automotive side, but crickets are chirping in the aftermarket. Leading retailers like Best Buy
This is good -- perhaps even great -- news for Sirius XM shareholders. The company should be shouting it from the heavens.
Gimme an S! Gimme an I! Gimme a moment to return this outfit.
More news than static on Sirius XM: