Friday, January 31, 2025

SiriusXM To Offer Ad-Supported Subscriptions


SiriusXM is betting that it can convert a pool of would-be subscribers into paying customers who will listen to ads in exchange for a cheaper subscription. 

On an earnings call, Chief Executive Jennifer Witz says the company is preparing to offer a lower-priced sign-up option to support the company’s growth goals. 

The satellite radio and audio-streaming company ended 2024 with fewer year-over-year self-pay subscribers who are responsible for paying their recurring fee for the service, and a lower-priced option could help the company reach a broader base. The company’s profit rose in 4Q, but sales dropped, with subscriber revenue down 5%.

The auto-minded satellite radio company (and Pandora parent) disclosed its fourth-quarter and full-year 2024 financials Thursday.

Diving directly into those numbers, SpaceX-partnered SiriusXM pointed to Q4 revenue of $2.19 billion (down 4.3% YoY) and, with operating expenses having declined, $287 million in net income (up almost 26% YoY) for the same window.

According to Digital Music News, the lion’s share of Q4 revenue came from core satellite radio operations. That refers specifically to $1.62 billion overall (down 5.6% YoY) as well as $1.50 billion solely from satellite subs (down about 5.4% YoY), according to the company, which brought on Wayne Thorsen as COO last month.

Pandora and off-platform revenue, for its part, was roughly flat year over year at $568 million for Q4, consisting of $434 million from advertising (down slightly YoY) and the remaining $134 million from subscriptions (likewise down less than 1% YoY).

And amid stiff competition from well-entrenched players such as Spotify, Pandora parted with 101,000 total self-pay Plus and Premium subscribers on the quarter, finishing 2024 at 5.77 million (down 279,000 YoY).

Additionally, Pandora’s ad-supported listener hours dipped (2.53 billion to 2.39 billion) in Q4 and fell more than that for the entire year (10.48 billion to 9.94 billion), the report shows. Advertising revenue per thousand listener hours grew a bit on the year but slipped from $111.27 to $108.37 in the fourth quarter.

During SiriusXM’s Q4 earnings call, CEO Jennifer Witz said the company, notwithstanding a coming embrace of “click to cancel,” expects “subscriber results in 2025 to be slightly better than what we saw in 2024.”

Furthermore, the exec pointed to strong usage growth for SiriusXM’s updated app and for podcasts (owing in large part to several exclusives) in particular.

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