Outlook: Higher Subscription Fees At SiriusXM

While subscriber gains have usually been the focus of most discussions concerning Sirius XM, the increase in average subscription fee is another important factor governing the satellite radio company's growth. Sirius XM's average subscription fee rose by roughly 5% in 2012, amounting to $124 per subscriber per year.

According to seekingalpha.com, this was primarily driven by the price increase that the company implemented last year, and the impact will be visible in 2013 as well due to the gradual roll-out.

Going forward, Seeking Alpha expects Sirius XM's average subscription fee to continue to increase at a moderate rate of close to 5%. While the adoption of Internet add-on, a compelling radio service, and rising royalty costs could push the average subscription fee higher, growing competition and promotional discounts are offsetting factors.

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