Skip to main content
  1. Home
  2. Audio / Video
  3. News

SiriusXM’s $3.5 billion purchase of Pandora just might be music to our ears

Kris Wouk
By

In an era dominated by streaming services, SiriusXM is still managing to thrive, but the satellite radio company is aware that the vast majority of its customers listen in the car. In 2017, SiriusXM began looking to move beyond the automobile, buying a 16-percent stake in streaming service Pandora for $480 million. Now the company is looking to bite off a much bigger piece, as it has moved to acquire Pandora in a $3.5 billion all-stock deal.

While Pandora is currently lagging behind major competitors like Spotify and Apple Music, this deal could give the service the resources to go after exclusive deals with artists, which Apple Music and Tidal have used to gain subscribers in the past. SiriusXM already makes use of this type of deal as well, as its exclusive rights to Howard Stern’s programming show.

Related Videos

If this deal goes through, it would make SiriusXM the world’s largest audio entertainment company, with more than $7 billion combined revenue estimated in 2018. The deal would combine SiriusXM’s 36 million subscribers and Pandora’s 70 million monthly active users, giving the company a wide base of customers. If the company decided to offer package deals, it could begin to combine those separate customer bases into one larger pool.

Related

This deal may not even happen, however. While SiriusXM expects the deal to close in the first quarter of 2019, the deal does include a “go-shop” provision. This allows Pandora to “actively solicit, receive, evaluate, and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement,” so it’s possible that another company could swoop in with a better deal.

“We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora’s strategic progress and stronger execution,” SiriusXM CEO Jim Meyer said in the press release announcing the acquisition. “We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses. The addition of Pandora diversifies SiriusXM’s revenue streams with the U.S.’s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the car even further.”

No matter what, this could be a big win for Pandora. The service has been on an upswing as of late, offering new features like personalized playlist The Drop, which allows it to better compete directly with Spotify. Adding the resources of a larger company may be just what the service needs to turn the “big two” streaming services — Spotify and Apple Music — into a “big three.”

Editors' Recommendations

Topics
Sonos CEO on Bluetooth epiphany: ‘you have to be humble enough to listen to customers’
Sonos Era 100, close-up on logo.

It can be hard for brands to admit when they got something wrong -- especially when they’ve spent time, money, and customer trust on a message. But taking a sober second look at a previous strategy, particularly when customers are telling you it’s not what they want, can be a necessary, if painful step.

That’s where Sonos finds itself today. With the launch of the company’s newest wireless speakers — the $249 Era 100 and $449 Era 300 — several previously held beliefs about what makes for a great home audio experience have been revised or tossed out entirely.

Read more
11 Sonos tips, tricks, and little-known features
Sonos Era 100, beside a turntable.

Sonos continues to be one of the best multiroom wireless sound systems you can buy, with whole-home speakers that range from Wi-Fi-connected single speakers like the stalwart Play One and surround sound beasts like the Sonos Arc to the portable Sonos Roam and Move speakers and the new, er, era of Sonos speaker, the Era 100 and Era 300 that seemingly do everything.

A Sonos system can spread music throughout your home, be configured with multiple products as a pretty excellent Dolby Atmos-capable surround sound system for your TV, and be used to connect your existing analog equipment to it for a tailor-made setup that works just for you -- they're some of the best speakers you can buy.

Read more
Sonos Era 100 and Era 300 first impressions: it’s all about immersion
Sonos Era 300.

Sonos has launched its latest wireless multiroom smart speakers — the $249 Era 100 and $449 Era 300 — effectively rebooting the company's entry-level product. It marks the end of the Sonos One, and its midsize offering, which had been noticeably absent since the discontinuation of the Play:3 in 2018. We'll have reviews in due time, but I've spent a little bit of time with the new kit, and here are my first impressions.

I got a chance to hear both the Sonos Era 100 and 300 in action at a private launch event in New York City. The demo room was hardly an ideal spot from an acoustics point of view -- a wide and shallow shape and drapes slung on some walls, while others were built from highly reflective glass -- and yet I was able to get a sense of both speakers' potential.

Read more