SiriusXM’s Smart-Speaker Partnership Not Exclusive to Amazon, Says CEO
SiriusXM’s agreement offering free three-month trials of its streaming services to Amazon smart speaker owners (see 1810180004) isn't exclusive but is a “great first step” in other possible collaborations “we’ve talked to Amazon about,” said CEO Jim Meyer on a Wednesday earnings call. Meyer wants the SiriusXM service “to be as easy to listen to on anything and on any platform,” and won’t close the door on similar collaborations with Apple or Google, he said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The Amazon agreement is a pure promotion deal among both of our platforms,” said Meyer. “We’re cooperating together to help deploy our free trials among their millions and millions and millions of users and at the same time we’ve agreed to help them deploy in a big way their brand-new Echo Dot 3" across the SiriusXM “user base,” he said.
There's “more to come between SiriusXM and Amazon as we think of additional ways to extend this relationship,” said Meyer. Amazon “has had great success as a reseller of other service providers’ services,” he said when asked how the companies might take their relationship further. “We certainly don’t have an agreement to do that yet, but that would be something we both might talk about.”
The companies “talk quite a bit about the Alexa voice interface, and about areas where perhaps we could work together to help with its deployment,” said Meyer. “We are intently focused on making our product significantly easier to access and to use anywhere customers want it, and we will work with any kind of distributor that shares that vision.” SiriusXM “knew that collaborating with a skilled distributor like Amazon could drive a significant lift to our service outside of the car,” he said. Amazon knows “diverse audio programming is probably the biggest value driver today in the smart speaker universe,” he said.
That the 30-day “go-shop” period in SiriusXM’s deal to buy Pandora (see 1809240047 or 1809240030) expired “uneventfully” at midnight Tuesday means “we're planning to get together and sharpen our pencils on our integration plan very soon,” said Meyer. He still expects the deal to close in Q1, he said.
Meyer thinks “everything is on the table” about what a combined SiriusXM and Pandora might look like, he said: “There is a big opportunity to expand Pandora's listening in the vehicle. They already do really, really well in mobile and they already do really, really well in-home. They don't do particularly well in the vehicle.”
Though SiriusXM is “thrilled” with its business and its nearly 35 million subscribers, it’s “just a fact” that the “vast majority of people still reject us” when they come to the end of their three-month free trials because “they don't want to pay,” said Meyer. Pandora might give SiriusXM a “big opportunity” to “point” those customers toward “another alternative” that doesn’t exist today, and “monetizing” them in a way that won’t “cannibalize” the “existing business,” he said.
With the go-shop period having expired, we'll start now the activity of planning for the integration,” said Chief Financial Officer David Frear. “One of the early things we'll do is get the tech teams together to figure out how to match up the data that we have with the data that they have,” he said: “Once we can mash the databases together, then we can get people to start looking at where the overlap is” in the subscription lists, as well as “where the gaps are," he said.
SiriusXM’s Q3 net profit jumped 24 percent to $343.05 million and revenue increased 6.4 percent to $1.47 billion. The company had 298,000 self-pay net subscriber additions in the quarter. Though that was 4 percent fewer than in Q3 a year earlier, SiriusXM raised its full-year forecast on self-pay net additions to 1.275 million from 1.15 million in the previous forecast. Shares closed 5 percent lower Wednesday at $5.65.