SiriusXM has lifted the curtain on the company’s plan to introduce ad-supported channels on its satellite and streaming radio plans — and the move could significantly change how people listen to satellite radio in their cars.
The new plan, called SiriusXM Play, will cost less than $7 per month when it rolls out later this year. At launch, the plan will offer access to more than 130 music, talk, news and sports programming channels advertising. SiriusXM promises the ad load will be less than that of traditional radio, though a marketing message reviewed by The Desk said commercial spots will last as long as 60 seconds, mirroring spots available on AM and FM radio stations.
SiriusXM has long viewed ads as the way to scale its business after experiencing multiple financial quarters of relatively flat subscriber growth. The company ended last year with just north of 31.6 million self-pay satellite and streaming radio subscribers, and has hovered between 30 million and 33 million subscribers for the past few years.
Last November, the company refreshed the pricing of its satellite radio tiers, charging customers $10 per month for access to a base plan with dozens of commercial-free music channels, then allowing subscribers to add on separate packages of news, talk and sports channels for additional fees.
SiriusXM Play is an attempt to target price-conscious consumers who felt the build-your-own-package opportunity was still too costly. The company apparently found inspiration from streaming video services like Netflix, Disney Plus and Hulu, which have offered lower-priced, ad-supported packages to their subscribers for several years.
SiriusXM didn’t say how it intends to deliver more than 130 ad-supported channels on its satellite system, which already offers nearly 200 legacy channels. But a source familiar with the company’s plan say existing customers with traditional satellite radio tuners will receive the ad-supported channels by default over the next few years, and customers will eventually need to switch out their hardware with a SiriusXM 360L tuner or use the SiriusXM streaming app to receive commercial-free stations in the future. The SiriusXM 360L platform uses satellite and streaming technology; the company’s limited free, ad-supported offering launched on those radios last year.
“SiriusXM Play presents us with an incredible opportunity to thoughtfully scale our audio service on the road and off to even more listeners across North America,” said Wayne Thorsen, SiriusXM’s Chief Operating Officer. “With Play, we can reach and engage with new, more price-sensitive listeners with a low-cost, ad-supported subscription with more than 130 channels available in-car and so much more in-app, and leverage our strengths across both content and technology as the premium audio leader in-car to deliver this compelling offering to consumers and advertisers alike.”
SiriusXM said its new SiriusXM Play plan will come with a number of other enhancements, including the ability to dynamically insert ads within certain channels on its SiriusXM 360L radios and better measurement capabilities for ad buyers.
“Play is an exciting net-new opportunity for marketers looking to tap into passionate, high-quality audiences across some of SiriusXM’s most beloved music, talk, and sports channels, reaching listeners in the moments that matter,” said Scott Walker, the Chief Advertising Revenue Officer, SiriusXM. “The car is the final frontier for digital ad-supported media. In the short term, we are opening up new inventory for marketers, including premium, curated music. In the long term, with more advanced capabilities, we have a chance to revolutionize the in-car advertising landscape.”
