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valunvesthere (22.61)

XM Satellite Radio brilliant marketing and fee structure strategy.



October 25, 2010 – Comments (1) | RELATED TICKERS: HMC , SIRI , DIAL

XM Satellite Radio (subsidiary of Sirius XM Satellite Radio (Nasdaq:SIRI)) is standard on some Honda and Acura vehicles (XM Satellite Radio is also available as option for others). With the purchase of Honda or Acura vehicles equipped with XM Satellite Radio you get 90 days FREE trial (includes XM online so you could listen to XM on your computer and smartphone).

After 90 days in Canada (XM Canada) for example you either pay:

* quarterly: cost $ 44.97CAD ($ 14.99CAD/month) payment by credit card only $ 53.63CAD (taxes & fees included).

* annually: cost $164.89CAD ($ 13.74CAD/month) payment by credit card $197.71CAD (taxes & fees included) or cheque $203.31CAD (taxes, fees and plus $ 5.00CAD processing fee included)

one time payment: cost $549.99CAD (as long as you own the vehicle) credit card $615.99CAD (taxes & fees included) or cheque $621.59CAD (taxes, fees and plus $ 5.00CAD processing fee included).

Getting to the point XM Satellite Radio is brilliant in offering the one time payment (as long as you own the vehicle) because if you do the math at $ 14.99CAD/month or $13.74CAD/month you'll have to listen to XM Satellite Radio for at least 3½ years in order for the service to pay for itself (not including XM Satellite Radio in vehicle). Today majority of car sales are leased for 3 years and now the one time payment (as long as you own the vehicle) is voided if the owner wishes to return the vehicle to dealership (now a used vehicle with XM Satellite Radio is on dealer lot waiting for a new owner of this used vehicle who is likely to become XM Satellite Radio subscriber) and XM Satellite Radio pockets the extra approximately 5 months (about $75.00 CAD to $65.00 CAD) the owner who activated one time payment (as long as you own the vehicle) no longer owns the vehicle (hopefully purchase another vehicle with XM Satellite Radio) and XM Satellite Radio will offer subscription to the new owner of the used vehicle equipped with XM Satellite Radio. Other factors that will fatten XM Satellite Radio pokets is if owner sells or loses the vehicle before the appoximate 3½ year period. Absolutely brilliant strategy marketing and service fee structure on XM Satellite Radio's behalf.

1 Comments – Post Your Own

#1) On October 25, 2010 at 11:56 AM, ikkyu2 (98.57) wrote:

You know, I've owned two cars with Sirius radio, and Sirius is not particularly good at being able to turn the service off.  One of the cars I paid for a year's subscription, then the car got parked and the battery ran down.  I think the receiver missed the messages to shut off service, because when I charged the car up again several months later, the satellite radio was still working, and I hadn't paid for it for months.

So all told, it's a good thing they're taking 'lifetime' subscriptions; because that's more or less how their service works. 



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