By Brandon Matthews

Sirius XM A La Carte radios are coming soon. How soon you may ask? This recent patent announcement suggests they are already here. In fact this new “invention” claims to allow existing legacy receivers to gain the advantage of being converted to an a la carte format. That’s right. No new hardware is required! The information seems to indicate that the a la carte feature is achieved at the point of transmission, rather than reception.

Abstract: According to the invention, a subscriber to a first satellite radio service can be provided with an option to receive, over their current receiver unit, supplemental content, such as a particular show or channel, which is otherwise only available within a relevant jurisdiction as part of a subscription package to subscribers of one or more other satellite radio services. Thus, without purchasing a full subscription to another service, the subscriber of the first satellite radio service may arrange to receive supplemental content that is otherwise only available as part of a subscription package, such as a basic or general subscription package, to subscription holders of one or more other services. The invention also provides methods of broadcasting and methods of configuring dedicated and interoperable satellite radio receiver units so that the supplemental content can be received by a subscriber.

As part of the merger memorandum opinion and order, Sirius XM agreed to bring a la carte radios to market, but stipulated that the condition would only be permitted via the Internet and new radio sets that would be introduced in the future. This new invention would seem to make that point moot. The memorandum states:

“…Applicants voluntarily commit to offer two a la carte offerings to subscribers.  “A La Carte I” would allow a subscriber to individually select 50 channels for $6.99 per month. Subscribers to A La Carte I, will be able to purchase additional individual channels for 25 cents per month each as well as “premium” packages of certain Sirius channels for $5 or $6 per month each and of certain XM channels for $3 or $6 per month each. “A La Carte II” would allow a subscriber to select 100 channels, including access to “best of both” programming offered by the other satellite provider, for $14.99 per month. Subscribers would have the ability to craft an individualized line-up that includes some of the most popular and appealing programming currently offered by the other provider. Subscribers would select the channels they wish to receive via Applicants’ websites. Applicants assert that the proposed a la carte plans would create public interest benefits in the form of lower prices and greater choice.”

The patented invention opens the door to countless possibilities. Allowing programming from either Sirius or XM to be received by existing receivers, could open the door to Sirius subscribers gaining access to Major League Baseball, which until now meant buying a new XM receiver. It could mean that fans of the Howard Stern Show could receive the show without buying a lot of incidental programming.

Financially, it appears Sirius XM has gotten out in front of this one as well. This may shed some light on the recently leaked 2.00 royalty fee that is being imposed as a result of the performance royalty agreement, as lower priced consumer options will require it to level the playing field and still maintain a path to profitability. A 2.00 increase would raise the base a la carte monthly price from 6.99 to 8.99.

Position: Long SIRI

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