SiriusXM and Pandora are now one. The two companies had been working on a merger since news of the acquisition plan broke in September. Now that deal has been finalized, it gives the combined entity more than 100 million subscribers in North America. According to a press release, the acquisition — which cost $3.5 billion in stock — gives SiriusXM “close to 40 million self-paying subscribers, and 75 million trialers and ad-based listeners in the U.S.”
With the acquisition complete, SiriusXM is looking at several ways to combine the two platforms, while exploring opportunities to cross-promote subscriptions to the two audiences. Initially, the company intends on offering SiriusXM promotions with the Pandora app, beginning this month. Select Pandora listeners will be offered a $5 a month SiriusXM music or news/talk package; while SiriusXM subscribers will receive an extended 14-day trial to Pandora Premium, according to Inside Radio.
Later this year, “we expect to deliver a new Pandora-powered channel to our SiriusXM app users based upon their favorite artist and a new radio channel, driven by the latest trend from Pandora’s billions of thumbs,” James Meyer, SiriusXM CEO told investors on the company’s fourth-quarter earnings call.
It may be tricky making the combined companies more powerful and valuable than the individual services alone. Despite the fact that almost half the owners of the SiriusXM-enabled vehicle fleet have used Pandora in the past two years, time spent on Pandora has been on the decline in recent months. From the third quarter of 2016 to the same period in 2018, Pandora lost 9.1 million active monthly listeners, or, just over 11 percent of its audience.
Still, SiriusXM has proven incredibly resilient even in the age of on-demand streaming music. Spotify continues to hemorrhage hundreds of millions of dollars annually, even as it continues to add subscribers. SiriusXM, by comparison, turns a profit and a fairly healthy one at that; in the third quarter of 2018, the company made $343 million.
The challenge for the SiriusXM will be to extract more revenue from Pandora listeners while giving them a reason to listen more — both in the car where the company is strongest and at home or on the go, where it has its greatest opportunity for growth.
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