SiriusXM will hike the cost of subscription rates by nearly a dollar for most packages starting early next year, according to a notice sent to customers in the mail.
For the first time, the music royalty fee will also be passed along to standalone SiriusXM Internet Radio subscribers. SiriusXM began passing along the cost of music royalties to subscribers in 2009 shortly after the merger of the two satellite radio companies. SiriusXM explains the royalty fee is used to fund artists and composers who hold the rights to various musical works that are broadcast by the service.

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The royalty fee resulted in a de facto rate increase, despite an agreement with federal regulators that it would not raise subscription costs as a condition of the merger. The company notes that the fee helps pay copyright holders for the redistribution of their work on satellite radio in contrast to traditional radio which does not have to pay a similar fee.

Subscription growth for the satellite radio company boomed when the service formerly known as Sirius Satellite Radio signed Howard Stern to a lucrative multi-year deal in 2005. Absent a renewal, Stern will leave the company at the end of his current contract next year. Starting in January, an additional fee of $2.08 will be tacked on to the monthly bills of internet-only customers, bringing the total cost to a little over $17 per month.

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