SiriusXM Wednesday outlined its strategy for increasing subscribers through its purchase of Pandora and its recently announced deal with Amazon.
While it remains committed to the automobile, SiriusXM said audio is growing, in part through the rise of home smart speakers, and it wants to take advantage of the trend.
“Audio’s never been hotter,” said SiriusXM CEO Jim Meyer on a call with analysts.
Under a new Amazon deal, those who purchase an Echo Dot receive a 3-month trial of satellite radio. Also, Sirius will give away Echo Dots to some of its subscribers.
Sirius radios are installed in 110 million vehicles and most of its over 33 million subscribers come from the automobile. But smart speakers are in high demand. Over 47 million US adults have access to a smart speaker according to Voicebot.ai, as reported earlier this year. So that’s one in five adults.
Sirius already works with Alexa devices if the user has the premier All Access subscription. Users can launch Sirius and choose channels via Alexa.
Meyer hinted in the future other synergies between Sirius and Alexa could be tapped. “Amazon has had success as a reseller of other service providers’ services. We don’t have an agreement to do that yet, but that’s something we think we might talk about,” he said, noting that there may be other areas where Alexa and Sirius could work together. He added, “That’s just two examples of where that relationship could go. I would expect us to announce more distribution type of arrangements over the next several months. We are intently focused on making our product significantly easier to access and use anywhere our customers want it.”
Meyer also explained a key reason for the purchase of Pandora. He hinted that those on a SiriusXM trial who choose not to continue can be directed to a subscription to Pandora. “At Sirius, we’re running about 20 million new trials in new and used [cars]. Most people don’t want to pay for radio at the end of the day. I feel there’s a strong opportunity if we can link non-converters to Pandora in a way that makes our combined business bigger and more profitable. We plan to give additional color on that in the next few months.”
Additionally, Sirius hopes to expand Pandora’s position in the vehicle.
For the recent third quarter, SiriusXM reported adding 298,000 net new self-paying subscribers for a total of 28.5 million self-paying subscribers and a total of 33.7 million subscribers overall.
The company reported a quarterly record in revenue of $1.5 billion with net income growth of 24 percent to $343 million. SiriusXM also raised its guidance for the full year and now expects to add a total of 1.275 million self-pay net subscribers for the year with revenues of $5.7 billion.
If SiriusXM really wants to gain subscribers they should really concentrate on improving sound quality. Hands down the biggest complaint we get from clients is having to pay for poor sound quality. It’s bad enough they have to pay for radio with commercials but top that off with compressed sound and it’s a deal breaker 90% of the time around here.