SiriusXM is planning a significant streaming reboot later this year.
While SiriusXM isn’t looking to remove itself from the satellite radio game, the company has set its sights on growing its customer base this year by reaching vehicles that are now internet-enabled. SiriusXM is keeping fairly tight-lipped about the details, but it plans to relaunch its streaming product by the end of the year, using much of what it has learned from Pandora.
“I believe we need to improve the features, the functionalities, the recommendations and reduce the friction,” said CFO Sean Sullivan at the Deutsche Bank Annual Media Conference this week.
While Sullivan said it would be “premature” to share many details, the company aims for a relaunch in the fourth quarter of 2023, part of a series of investments SiriusXM is making, including behind-the-scenes actions that enable more “agility and flexibility” in its subscriber management system — notably, in rolling out rate increases later this month.
Despite SiriusXM serving as the parent company to streaming radio service Pandora, which suffered a 9% decrease in 2022 with 47.6 million monthly active users, SiriusXM has gained a more robust understanding of the online streaming business.
“We’ve added a tremendous number of resources to support that group, and a lot of that is bringing on new capabilities, and prior experiences that we think will quickly advance our product,” says Sullivan. “From what we’ve acquired in Pandora, from what we’ve hired with the tremendous amount of resources within the product and tech group, we have the capability. The real focus now is on executing the roadmap.”
Sullivan told investors that streaming-only subscribers remain a “small portion” of the company’s 32.4 million subscribers. However, he stresses that it has become a significant part of the self-paying users versus those who acquired satellite radio as part of a vehicle purchase package.
“We’re very comfortable with the unit economics of a streaming sub versus an in-car sub. We’re committed to it, but we’re going to take a more measure approach to relaunch later this year,” Sullivan continues.
In the short term, SiriusXM plans to roll out increases to its rates later this month, as Sullivan says that most customers will pay an additional dollar for a full-price plan. The company expects few cancellations based on earlier rate hikes, but it will continue offering discounted promotional rates to coax new subscribers.
SiriusXM recently announced plans to lay off 475 employees, 8% of the company’s workforce. CEO Jennifer Witz told employees in a company memo that the move was necessary to “secure the long-term health and profitability” of the business, not unlike many other companies in the technology sector.