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SiriusXM Pandora sued over satellite radio promotional rates

(Image: SiriusXM/Handout, Graphic: The Desk)

A California man is suing SiriusXM Pandora over promotional rates that are offered to some of its existing subscribers.

In a complaint filed in federal court this week, Bakersfield resident Joseph Enriquez charged SiriusXM with engaging in “unlawful and unfair marketing and advertising practices” by charging some subscribers as much as $22 a month for streaming and satellite radio service while offering a substantial discount to other subscribers.

Like other companies, SiriusXM Pandora lures new satellite and streaming radio customers to its service with a combination of free trial offers and long-term discounted rates, with most new customers eligible to receive a premium satellite and streaming radio subscription for around $60 a year.

That rate is marketed to new customers, but Enrique says the deal is also available to existing customers who contact SiriusXM with a threat to end their subscription — a tactic that is common knowledge among some frugal SiriusXM customers who often do just this in order to save money on their service.

Enrique complains that he and other customers are at a disadvantage when they pay the normal rate for service after believing the promotional plans apply only to new customers.  He argues that it’s difficult to know about promotional or discounted rates for current subscribers like him because SiriusXM doesn’t advertise them — instead, current customers only learn of their eligibility when they call to cancel.

“As a result of [SiriusXM]’s business practices, Plaintiff has suffered an ascertainable loss of money, including, but not limited to, out-of-pocket costs incurred in paying non-promotional rates at times when he did not immediately contact [SiriusXM] customer service agents to obtain new promotional pricing,” the complaint says.

The lawsuit was originally filed in state court in July, but was removed to federal court earlier this month at the request of SiriusXM.  In a court filing reviewed by The Desk, SiriusXM said it could lose more than $75,000 from its California customers alone if it was forced to change the way it offers retention discounts to current subscribers based on its current, regular rate of $17 a month.

“At $203.88 per year for the standard subscriber, it would take a loss of only 368 California subscribers to create more than a $75,000 loss in revenue in one year,” the company said. “Sirius XM estimates that a prohibition on its ability to offer temporary price promotions in California would result in a loss of 368 or more subscribers.”

It was not clear if the plaintiff in the case was seeking class action status.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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