Satellite and streaming audio service SiriusXM Pandora has issued revised subscriber guidance, with the company saying it expects to add 700,000 paying subscribers by the end of the year.
“Our business continues to demonstrate strong performance and favorable trends since we resumed providing our subscriber and financial guidance in conjunction with our second quarter earnings report,” SiriusXM Pandora chief executive Jim Meyer said in a statement to investors on Thursday. “Our conversion and churn performance remain excellent, and it’s clear that demand for SiriusXM remains strong. Quite simply, consumers continue to find immense value in our unique audio bundle and all of the entertainment and information it provides”
SiriusXM Pandora’s primary audio product is its legacy radio offering, which offers more than 140 channels of music, sports play-by-play, talk radio and cable news simulcasts across two satellite platforms. In recent years, SiriusXM Pandora has built upon the satellite radio service by increasing its supplemental streaming service — which is now offered as a standalone streaming radio product as well as a supplemental one to the satellite service — and by acquiring online services like Pandora Radio and Stitcher.
For the radio service, SiriusXM Pandora’s biggest marketing tool is its hardware integration in new cars and trucks sold in the United States and Canada. SiriusXM Pandora offers new car buyers a three-month trial of its satellite radio service and often makes deep discounts available to new and current subscribers who are willing to stick with the service.
Over the last year, SiriusXM Pandora has marketed its standalone streaming service to younger, podcast-savvy subscribers who are accustom to streaming music on their phones and smart speakers. The company has offered the streaming-only version of its radio service at a discounted rate compared to the satellite service and has offered promotional deals that bundle SiriusXM Pandora’s streaming service with compatible smart speakers made by Amazon and Google’s Nest.
Taken together, those moves have created an environment where SiriusXM Pandora believes it will end the year with 700,000 new, paying subscribers — up from earlier projections of 500,000 — which will earn the company around $7.7 billion in total revenue. From that, the company expects overall earnings before taxes, depreciation and amortization to land around $2.4 billion.
But SiriusXM Pandora’s biggest days and deals may still be ahead: The company is currently holding discussions with Howard Stern, the producer and host of SiriusXM Pandora’s flagship morning talk program and one of the biggest drivers of subscribers to the service. Stern has spent 15 years with the satellite radio company, helping it earn more than 30 million paying subscribers since joining the former Sirius Satellite Radio in 2005.
Stern often hints at a possible retirement from radio or a break from SiriusXM Pandora during contract negotiations, but he has renewed his five-year contract twice before, and there are indications he may do so again this year.
In addition to its deal with Stern, SiriusXM Pandora has agreements with Netflix, ViacomCBS’s Comedy Central, Comcast’s NBC News, SoulCycle, Disney’s ESPN, Major League Baseball, the National Football League and other companies to co-brand and program channels across its satellite and streaming services.