By Amy Gilroy
Sirius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin announced at the Bank of America/Merrill Lynch Media Communications and Entertainment Conference in Beverly Hills, CA that the Satellite Radio service provider will increase prices in January, which will bring its most popular plan to $14.49 per month up 11 percent from the current $12.95.
The company noted that since it launched 10 years ago, it has added popular programs from the NFL, NASCAR, Howard Stern, Martha Stewart and others. “We’re asking subscribers to pay an additional 5 cents a day,” said Karmazin, adding that programming will expand further with the launch of Sirius XM’s Satellite Radio 2.0 in coming months.
The plan will take effect for subscribers after their current contract expires starting January 1.
The CEO also reassured investors that not only is the company sticking to its guidance this year of $3 billion in revenues, but that it expects to accelerate growth in 2012. It plans to boost revenues by 10 percent to approximately $3.3 billion, with free cash flow growing 75 percent to about $700 million.
Sirius XM expects to add about 1.6 million subscribers in 2011.
Amy Gilroy is the Editor of CEoutlook and a Contributing Author to Market Playground and Satellite Radio Playground.
Really interesting that they revealed so much forward projections—I think a credit upgrade is coming
I agree on the credit upgrade. What I find interesting is that the expected increase of revenues $3B to $3.3B (net increase) of $300M seems to be falling right to the bottom line (FCF $400M to $700M).
$300M / $1.50 per month / 12 months = 16.6M base subs.
Looks like this increase in guidance is completely the price increase.
It does not take an increase in growth into account.
I think Mel is low-balling it. Simply awesome.