Sirius Xm Case Summary

Yes, the mass exodus of subscribers is quite alarming to Sirius XM. The reason that this is alarming is because it was the first time in the 3-year period (2011-2013) that there was a net subscriber loss and additionally, subscriber deactivations were at an all-time record high on the transition from Q3 to Q4. The first reason that there could’ve been massive turnover is because of the increase in price enacted by the FCC. Having the minimum subscription cost be $9.99 when it used to run at $6.99 possibly turned a lot of consumers away after their trail subscriptions expired with the automakers. The main reason that I think many consumers turned away however was because “many new vehicles had in-dash connections that enabled drivers to plug in smartphones and other mobile devices and listen to downloaded or streamed music from sources other than Sirius”. Having car listening be Sirius XM’s largest, and most prominent form of usership, when a new technology entered the market it cut a large portion of usership out as consumers transitioned away from Sirius XM. This new technology had been prevalent before, but now that it is in new cars it is something that Sirius must now compete with, so the net subscriptions stops turning into a net loss.
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Consumers now-a-days have so many different platforms that they are able to listen to music on, that the loyalty to one specific medium is extremely low. Substitute options are immense, but having a celebrity do a daily talk show only on your service will drive many consumers to purchase the subscription. The reason for this is because it is very rare that one type of music or song will be limited to a platform; but by signing a contract with these on-air personalities, it can give you exclusive rights to their content making other options obsolete if consumers want to listen to