Satellite-radio firm SiriusXM published its latest quarterly financial results yesterday, and among the numbers revealed was a continued decline in streaming service Pandora’s users. Pandora had 66 million monthly active users (MAUs) in Q1 2019, down from 68.8 million in Q4 2018, and 72.3 million in Q1 2018. That’s a year-on-year drop of 8.7%, with Pandora’s ad-supported listening hours down by 10.5% to 3.4bn in the same period.
“Stabilising and growing listener hours on the platform is priority number one at Pandora [and] is going to take time and hard work, but we pride ourselves in doing what we commit to do, and I am confident we will get this right,” SiriusXM CEO Jim Meyer told analysts last night.
On the positive side, Pandora now has nearly 6.2 million ‘self-pay’ subscribers, up 9.5% year-on-year, with 6.9 million total subscribers once promotional offers were factored in. Meanwhile, Pandora’s advertising revenues grew by 7% year-on-year to $231m in Q1, while its subscription revenues grew by 29% to $134m. Strange though it may sound for a company so historically focused on ad-supported music, Pandora’s business is now 36.7% subscriptions. Also interesting: the mention that last year Pandora ‘restructured’ some of its label deals, reducing its minimum guarantee payments.
As for SiriusXM itself, the satellite-radio business grew by 8% to $1.5bn in Q1, ending the quarter with nearly 29.1 million self-paying subscribers, and 34.2 million subscribers overall once non-self-paying people were added in. SiriusXM thus saw a 3% increase in subscribers year-on-year, and a 4% increase in average revenue per user (ARPU) to $13.52. Across both business lines, SiriusXM recorded a net profit of $162m in Q1.
It’s the synergies between the two companies that Meyer was keen to highlight. “We will launch a personalised streaming music feature within SiriusXM powered by the Pandora Genome,” he told analysts. “Think about that. Just a few months after the merger, the heart of Pandora’s personalised service will become a part of the SiriusXM experience. These long-term investments in SiriusXM product and brand are a big, big deal.”