SiriusXM has introduced a new service tier that offers a handful of music, talk and sports channels for free on its Internet-connected car radios.
The plan, called SiriusXM Free Access, is available in vehicles with radios that support the SiriusXM 360L platform, which offers linear radio channels and on-demand programming through a combination of satellite and streaming data delivery.
The SiriusXM Free Access service includes commercial breaks throughout its channels. Around two dozen free music streams are included, spanning across genres like alternative rock, pop, hip hop and country. Four sports channels — ESPN Radio, Fox Sports, NBC Sports Audio and Infinity Sports Network — are also included, as are simulcasts of cable news channels like CNN and MSNBC. Two comedy channels — Comedy Central Radio and Conan O’Brien Radio — are available through the free plan, as are special interest channels like NPR, PRX, Fox News Headlines, The Catholic Channel and BYU Radio.
There are some limitations with SiriusXM Free Access — it only appears to be available once a free trial expires, which is typically offered when a customer purchases a used or new vehicle. Customers are limited to one vehicle with SiriusXM Free Access, cannot transfer their subscription to another radio, and do not get streaming access through the SiriusXM apps as part of their service.
Perhaps the biggest string associated with SiriusXM Free Access is that customers have to actively use the service at least once every 60 days, or the plan will be permanently cancelled, according to some fine print spotted on the SiriusXM website:
“You must use the service at least once every sixty days, or the radio will be deactivated and the plan canceled. The plan will not be reinstated if canceled, deactivated or if a plan change is requested.”
SiriusXM Free Access comes after several years of the company reporting relatively-flat subscriber growth. On Thursday, SiriusXM revealed it lost 100,000 paid subscribers to its radio service during the second quarter (Q2) of the year, marking the latest quarter that the company has posted subscriber losses.
The number of promotional customers who churned out of the service after their free trial or extended discount ended was 73,000 for the quarter, indicating a total net subscriber loss of 173,000.
The free tier of service could help turn things around in a number of ways: SiriusXM Free Access allows the radio brand to sell targeted advertisements to in-car listeners utilizing a combination of data like geolocation and subscriber profiles, similar to how other connected radio platforms generate revenue. It could also win over customers who prefer a commercial-free experience, or who find themselves liking the radio service and want more music and talk programming options, which would require a paid subscription.
If it is successful, SiriusXM may expand its free offering by developing additional ad-supported tiers of its radio service, CEO Jennifer Witz said on a conference call Thursday morning.
“Although small in scale at the outset, free access is expected to grow in future years, providing us an opportunity to increase trials, win back listeners, and explore the potential for a broader ad-supported tier of SiriusXM,” Witz affirmed.
The CEO noted that SiriusXM has “millions of in-car subscribers who stream” live and on-demand radio channels using the app — one of the first times any executive at SiriusXM has offered insight into how many customers are using the streaming version of the service — and that “there is a cohort of listeners that want to experience our service through the mobile app or in-home connected devices, and we’re building better capabilities for them too.”
“Ultimately, we want customers to be able to listen on the device of their choice,” Witz said on the call. “So, we are repositioning our business for the future. We’re not ramping as quickly as we thought in streaming only, but we are implementing a lot of changes, and what we’re seeing does give us confidence in the future of our offering.”
For the quarter, SiriusXM’s total revenue clocked in at $2.18 billion, or 3 percent lower on a year-over basis. Net income rose slightly to $316 million.
