Subscription Sales

Just as consumers now pay for HBO, they may one day be charged for a digital music service as part of their monthly Internet bill. After resisting subscription services out of fear they would weaken CD sales, music companies are considering the idea in an attempt to reverse plummeting sales and unabated illegal downloading of music from the Internet.

Sirius Satellite Radio Inc., operator of the second-largest pay-radio service, increased its subscribers 82% to more than 6 million last year, in line with a reduced forecast last month. The company also had its first quarter of positive free cash flow in the fourth period of 2006, according to preliminary data, New York-based Sirius said. Sirius said Dec. 4 that it would have 5.9 million to 6.1 million subscribers at year-end, fewer than the 6.3 million predicted Nov.

XM Satellite Radio Holdings Inc. reported a year-end subscriber tally Friday that fell short of its earlier forecast, which had been lowered twice. XM, the larger of the nation's two satellite radio broadcasters, said it ended 2006 with 7.63 million subscribers. That was up almost 1.7 million from a year earlier but short of its most recent prediction of 7.7 million to 7.9 million. A year ago, XM was forecasting 9 million subscribers at the end of 2006.

DirecTV Group Inc. will raise subscription prices by almost 4% on average, aiming to boost revenue yet remain competitive with cable alternatives. The increase will take effect March 1, said the El Segundo-based satellite television provider, which has 15.7 million subscribers. DirecTV's average subscriber paid $72.74 a month for the service in last year's third quarter, the company reported. By limiting price increases, DirecTV aims to boost sales even as cable operators such as Comcast Corp.

AT&T Inc., the largest U.S. phone company, said it had 18,000 video subscribers to its U-verse television service, a sixfold increase from last year, as it battled cable providers. The company is connecting homes to the television service at a rate of 2,000 per week, it said. U-verse TV will debut in the Los Angeles area in the coming weeks, San Antonio-based AT&T said. AT&T is offering TV service to fend off cable companies selling home-phone lines in addition to video and Internet.

Time Warner Cable Inc. continued to lose pay-TV customers in Los Angeles and Dallas during the first quarter as it struggled to recover from botched efforts to integrate other cable systems it acquired last summer. But sales gains in so-called triple-play packages which include TV, Internet and phone service, helped the nation's second-largest cable TV company post double-digit increases in revenue and profit.

Satellite television provider DirecTV Group Inc. said Wednesday that it reached a deal to offer subscribers high-speed Internet and voice services carried by Current Group over electric power lines. DirecTV will be able to offer its customers the services as early as the end of this year, with initial coverage extending to the Dallas-Fort Worth area for 1.8 million homes and businesses.

Shares of Leap Wireless International Inc., operator of the Cricket and Jump mobile-phone services, dropped the most in three years Friday after it predicted subscriber gains that missed analysts' estimates and it decided to restate results. Leap added 36,500 subscribers in the third quarter, missing its forecast of at least 40,000, according to the San Diego-based company.

Newsday and the Spanish-language publication Hoy have agreed to pay a $15-million fine to resolve a criminal investigation of a scheme to boost circulation figures, prosecutors said Tuesday. In a statement, the U.S. attorney's office in Brooklyn said it had decided to drop the prosecution in light of the newspapers' "acceptance of responsibility for the fraudulent conduct."

Vongo. A new dance craze? No, it's a new subscription service offering feature films via the Internet. Launched last month by Starz Entertainment Group, which primarily runs cable-TV movie channels, the $9.99-a-month service is an all-you-can-eat arrangement that allows subscribers to view about 850 movies as many times as wanted. That is, until the subscription expires or the film rotates out of Vongo circulation.