SiriusXM, Pandora expected to remain separate entities

When SiriusXM announced in 2018 it was acquiring streaming music service Pandora for $3.5 billion, many in the media industry expected the former to fold the latter into its company, retooling SiriusXM as both a linear and on-demand brand that encompasses all things audio.

More than a year later, SiriusXM has launched a few new features that harnesses the music curation and discovery platform that Pandora has become synonymous with for more than two decades, but the two companies are still, to the surprise of some, separate brands.

The decision to keep SiriusXM and Pandora as separate offerings is by design now, but it wasn’t the intention from the start.

“I really [thought the acquisition of Pandora] would be a simple merger,” Denise Karkos, the company’s chief marketing officer, said at the Consumer Electronics Show last month. “Two brands, bringing the best of both together…strengthening each one with other’s capabilities.”

But that’s not in the cards for the long-term, Karkos said. Post-merger, SiriusXM executives realized Pandora operated better as a separate brand with separate design, product and marketing teams.

That’s not to say SiriusXM and Pandora haven’t overlapped in the 12 months since the deal closed. Since last February, SiriusXM has peppered its radio offerings with Pandora features, including artist-specific on-demand radio stations available to top-tier streaming customers and a radio slot on SiriusXM’s legacy satellite service called “Pandora Now,” which aggregates the top artists and songs streaming on the platform.

Likewise, Pandora has integrated some of SiriusXM’s on-demand content into its platform. Last year, a handful of SiriusXM shows became available on Pandora as podcasts, and the company launched a year-in-review feature on Pandora that included around three dozen excerpts of interviews produced by the Howard Stern Show — one of the few times that company has made large portions of its flagship morning talk program available to customers of a different service.

While there’s some overlap in customers of both services, Karkos said the marketing tactic of each brand is different. SiriusXM is more of a “direct marketing type of play,” Karkos said, reaching customers mostly in cars who want to listen to commercial-free music, talk radio and sports during their commutes, while Pandora is “much more of an emotive brand play,” connecting music lovers with their favorite artists and offering algorithm-based recommendations of other songs to listen to.

At the core of the merger is data: SiriusXM will learn what Pandora customers want, and that could be key to driving more people to the SiriusXM’s more-expensive satellite and streaming radio platform. With customers floating between the two services, SiriusXM is positioning itself as a dominant player in the audio industry, and recognizing the difference between the platforms and the customers they serve help the parent company better plot an overall growth strategy.