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Sirius XM Canada saw revenue jump in the third quarter but warns that listeners may tune out if the NHL lockout continues.© Steve Marcus / Reuters/Reuters

Revenue surged at Sirius XM Canada through the summer as more customers started paying for its service, but the company warned that an extended National Hockey League lockout could see some customers tuning out.

The company – which was created when Canadian Satellite Radio Holdings merged Sirius and XM Canada in 2011 –said revenue increased 13 per cent in its fourth quarter to $68-million. While its subscriber base increased to 2.2-million, the number of paying subscribers increased 13 per cent to almost 1.6-million.

While the company said it will pay less to the NHL for broadcast rights if games aren't being played, it's more concerned about the long-term impact of the lockout, which threatens to wipe out the season. The broadcaster carries all of the league's games on its service, which is a major draw for sports fans in rural and out-of-town fans.

"While an ongoing work stoppage will likely result in a reduction in fees paid to the NHL as part of the Company's license agreement which involves the right to broadcast all NHL games, our business may also be negatively impacted as some customers may cancel their subscriptions as a result of the work stoppage," the company said in its filings. "At this point we are unable to determine with a fair degree of certainty, the impact to our financial results."

Still, the company posted a $4-million loss.

It has never posted a profit, and is waiting for a licence renewal decision from Canada's broadcast regulator that could determine its fate. When it first received a licence in 2005, it was asked to pay out a percentage of its revenue to support Canadian talent that is higher than what is charged to traditional over-the-air broadcasters.

It has argued the fee is too high, and has asked for a 90 per cent reduction. While unprofitable, the company has paid $52-million to the CRTC in the past seven years. That's almost $20-million more than Canada's 400-plus commercial radio stations paid, in total, over the same period. The CRTC takes money from radio broadcasters and redirects it toward programming that helps recording artists produce content.

A decision is expected by the end of the week.

The company also hopes that a new subscription tier will help it help it lure customers willing to pay more for enhanced services. Its new package, which at $19.99 costs $4 more a month than its traditional service, allows listeners to listen to popular programs such as the Howard Stern show on demand and gives them the ability to scroll through five hours of buffered content at a time when listening live radio.

"Subscribers are now able to access premium content from both Sirius and XM platforms," chief executive officer Mark Redmond said. "We believe these premium services, in addition to the modest price increase of our base subscription rate will contribute to growth in fiscal 2013 and beyond."

While profits have been hard to come by, the company continues to amass money in its bank account. At the end of the quarter, Sirius XM Canada had $51-million.

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