SiriusXM adds satellite subscribers as Pandora premiums dip

SiriusXM, the home of broadcaster Howard Stern and one of the few ways to receive national play-by-play coverage of major sporting events, added 355,000 satellite and streaming radio subscribers during Q4 2019, the company announced on Tuesday.

At the same time, the company shed 88,000 subscribers of its premium offerings on Pandora, the streaming music company it acquired in February 2019 for $3.5 billion.

The company finished the quarter with nearly 35 million SiriusXM satellite and streaming radio subscribers. Only around 5 million of those customers are on free trials, the company said. SiriusXM offers courtesy subscriptions on a limited basis to people who purchase new or used cars, have inactive radio subscriptions or sign up for a trial through a promotional initiative.

SiriusXM has been aggressively targeting new streaming customers through a variety of campaigns, including one around the holidays that offered subscribers a free Google Home Hub after SiriusXM became available on Google Assistant-powered devices. Previously, SiriusXM offers subscribers a free Amazon Echo Dot when they committed to the service for a certain length of time.

“Looking forward to 2020, we’re excited about a new decade of opportunity before us and confident in reiterating our guidance for the year,” Jim Meyer, the chief executive of the radio company, said in a statement accompanying Tuesday’s earnings release.

On a conference call with investors, Meyer said the previous year had been a challenging one as SiriusXM began folding Pandora into its media offerings. The company laid off numerous employees across both SiriusXM and Pandora after those positions were deemed redundant after the merger.

On Tuesday, Meyer said he was “bullish” on the integration between the two products. Some cross-marketing has already started, with Pandora offering dozens of on-demand clips from the Howard Stern Show around the holidays and SiriusXM launching a Pandora-branded pop music channel.

Unlike SiriusXM, Pandora offers free access to its core service that is supplemented by commercial advertisements. Ad revenue at Pandora climbed to $348 million for Q4 2019, up from $314 million the previous year.

Pandora offers two premium services: A $5 a month offering that eliminates ads from user-created radio streams and a $10 a month service that allows users to listen to songs on demand similar to offerings from Apple and Spotify. Encouraging customers to sign up for those premium subscriptions has proven challenging for Pandora, and the same is true after SiriusXM acquired it: Pandora lost 88,000 subscribers in Q4 2019 to end the year with a little more than 6 million paying customers.

Pandora may be suffering from some cannibalization by its bigger parent: Last year, SiriusXM reversed a decision to offer its streaming service as a separate premium offering, integrating it as a free service for customers on traditional satellite radio subscriptions. It also lowered the price point of standalone subscriptions to $13 a month, which includes access to commercial-free artist-powered Pandora stations from within the app and on-demand video and audio access to SiriusXM’s popular shows, including the Howard Stern Show. It also rolled out a separate “essentials” streaming package that costs $8 a month with many of the same features sans the Pandora streams and Howard Stern (the company does not specify how its 34 million subscribers access the service, whether on satellite radio or over the Internet).

SiriusXM is majority-owned by Liberty Media Corporation.