When US music-streaming service Pandora recently announced plans to be acquired by satellite-radio firm Sirius XM, it also revealed a ‘go-shop’ clause enabling it to seek out alternative buyers for a limited time. That period is now over, and Pandora is sticking with SiriusXM, predicting that the acquisition will go through in the first quarter of 2019.
The news came as SiriusXM announced its latest quarterly financial results. In the third quarter of 2018, its revenues grew by 6% to $1.5bn, while its net profit grew by 24% to $343m. The company ended Q3 with 33.7 million subscribers, including 28.5 million ‘self-pay’ (i.e. people who weren’t getting SiriusXM bundled in to the price of a new car).
In its earnings call with analysts, CEO Jim Meyer stressed that SiriusXM is keen to be beyond cars: for example, hundreds of thousands of its subscribers are listening via Amazon’s Echo speakers. “It’s clear to me that audio on these smart speakers just clicks. It works beautifully,” he said.
Meyer also talked about the plans for Pandora. “We’ve concluded we can do many things better together versus apart. Number one is the ability to cross-promote across the two platforms that could come from sharing of listening data and contact data,” he said. “The truth is the flip side of our conversion statistics will tell you that most people don’t want to pay for radio at the end of the day. I feel there is a strong opportunity if we can link non-converters back to a Pandora or maybe a Pandora with a bit more content in a way that makes our combined business bigger, better and more profitable.”
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