SiriusXM Select In-Car Subscribers to Get Free Streaming This Summer, Says CEO
SiriusXM will begin offering free “access to streaming” this summer to subscribers of its $15.99 monthly Sirius and XM Select in-car satellite radio packages, enabling its largest bloc of customers "to take SiriusXM content out of the vehicle,” said CEO Jim Meyer on a Q1 earnings call Wednesday. “With this step, we hope streaming becomes part of the SiriusXM experience for a much greater number of our subscribers.”
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 stock fell after SiriusXM reported a 44 percent Q1 net-profit decline from a year earlier to $162 million. SiriusXM blamed the decline partly on $76 million in Pandora acquisition and other costs.
With the launch of free streaming to subscribers of SiriusXM's most popular package, plus automaker OEM adoption of the 360L connectivity platform and the debut this week of Essential, the $8 monthly, 300-channel streaming subscription plan (see 1904220019), “more of our content delivery than ever will be across” internet protocol, said Meyer. “And that’s before we talk about Pandora."
SiriusXM, three months into its Pandora ownership, is “right where we want to be, and moving very fast,” in combining the two, said Meyer. “It’s still the first inning, but I’m pleased with the enormous progress we’ve made so far.”
Finding SiriusXM/Pandora “revenue synergies” will be the “next focus, and will take a bit longer,” than the “cost reductions” process now underway, said Meyer. “I’m not going to give you an answer today” about specific examples of revenue synergies, he said in Q&A.
Meyer is “confident” of finding “endless possibilities” of revenue synergies, he said. “We’re going to test a whole bunch of things, my guess is, for a long, long time,” he said. “Inevitably, we ought to be able to fish in a pool of 100 million active free listeners, and be able to pull out of that people who are willing to pay and put them into pay products that yield the best margin for our shareholders.”
“Stabilizing and growing” Pandora listener hours, which have been in steady decline the past three years (see 1903120026), is “priority No. 1” at the new subsidiary, said Meyer. “It’s going to take time and hard work” to reverse the trend, he said. "I'm confident we will get this right."
SiriusXM wouldn’t have introduced the Essential streaming plan “if we didn’t think it was a good, profitable product for us,” said Meyer to a question about how big he thinks the service can become. “I’m excited about getting out there and getting this price point going.”
The “stand-alone streaming area” is “newer to us” than satellite radio, so “I’m not going to hazard a prediction yet” on Essential revenue or subscribers, said Meyer. “I’ve been pretty clear, though” that streaming “is an area of focus where we want to drive subscriber growth,” he said. Shares closed 7.2 percent lower Wednesday at 5.71.