An article by Scott Moritz on TheStreet.com yesterday about the possibility of raising subscription rates coming for SIRIUS got me thinking. With word that SIRIUS will be adding a "significant number" of repeaters this year - with the intention to provide satellite radio services like video and data delivery - thoughts of not reaching CFBE anytime soon are again swimming in investor's heads. One option? Raise prices. This isn't a new thought, as Mel brought it up in February saying that there's a "signficant opportunity" to do so, and rumors of it have been floated since before that.

Bear Stearns analyst Bob Peck brought up another scenario in his report last week to create a multi-tiered system - a premium service and a regular service - to help balance out the costs. Others feel (myself included) that a multi-tiered pricing structure would simply confuse the consumer and be yet another mental barrier to entry to try to overcome. People have a hard enough time grasping the concept of "paying for radio" to begin with, multiple pricing options just set to confuse the market.

That in itself is also the argument against raising prices in general. The higher you go, the more you stifle new subscriber growth. You may slightly increase churn, but current subscribers are already hooked. It's new subscribers that would have a problem with it.

XM isn't immune to this discussion mind you. The resignation of Jack Roberts was a clear signal about the concern of spending vs growth (a concern every business has). They're expanding their services as well, and with "The Content Wars" coming to an end, both satellite radio services need to continue progress while balancing costs. Smaller devices, newer services, improved technologies - and let's not forget about launching new satellites (XM-4 is due on the launch pad later this year). All this costs money.

But how much is too much when it comes to price? Should these new services like mobile/portable video be an added value to satellite radio? Or do they belong as a separate subscription service altogether like the weather services? I can see the value of both XM and SIRIUS disassociating themselves from "just radio" and moving more towards a satellite radio service. But The costs involved to create these new services are incurred to the company across the board - how should the profits then be distributed? Food for thought.

[The Street] 

According to Phonescoop Cingular CTO, Kris Rinne, yesterday revealed that the carrier is looking at other options to deliver video to its subscribers. With MediaFLO or Modeo possibily in play to deliver video over Cingular's terrestrial network, Rinne said they're looking to a new satellite video provider - who explicitely is not DISH or DirecTV. Curious. We know to expect XM Video and SIRIUS Video sometime soon, but will Cingular's cell network be the delivery method?

Now, combine that with the recent Lucent patent of delivering satellite radio over cell networks, and you've got yourself a plausible story. Remember that Lucent won a contract with Cingular back in Q405 to provide IP Multimedia Subsystem (IMS) services across Cingular's entire network.

The question is, which satellite radio/video provider could be in play? With SIRIUS already in bed with Sprint, it seems that makes XM winner by default, but that's just speculation folks. 

[Phonescoop]
Thanks cb!