Tuesday, March 08, 2005

Why subscription pricing sucks

Shelly Palmer, Chair of the NY chapter of Nation Academy of Television Arts & Sciences, grouses on why XM Satellite Radio recently increased its price for its subscription service to match its rival, Sirius. XM justifies the price hike by pointing to all the new content they just acquired, which doesn't come cheap. Palmer complains that as a Manhattan resident he has little use for the new features and programming that XM added to its lineup including ACC, PAC-10, Big Ten college football and basketball and traffic and weather channels. Moreover, as a subscriber he was never asked if he wanted all of this new content and its accompaning fee increase. Satellite radio does not subscribers the option to choose a la carte instead of all-inclusive pricing.

Instead of apeing cable TV's model of "more stuff, higher fees," satellite radio might want to take a cue from the Interent and other web-based services where the consumer is in ultimate control. The consumer dictates when, where, and for how much he will consume and pay for content online. Web 1.0 was all about replicating the top-down thinking of mainstream media (MSM), while Web 2.0 is all about empowering consumer choice.