Audio entertainment giant SiriusXM, the home of Howard Stern, on Tuesday reported continued growth in its satellite radio and Pandora subscribers.
By the time Roger Lynch took over as the company’s fourth CEO in four years, the chances of rising from the ashes were slim. “Everyone wants to feel like they’re on a winning team, and employees really loved the company but felt like it was losing,” Lynch tells Rolling Stonenow, almost exactly one year after he took charge of the slipping business. But Pandora has actually weathered that year well — and, to the surprise of many, even came out a bit stronger at the other end. Headlines lit up the company once more last month, but with a very different sheen: Satellite radio giant SiriusXM announced its intent to buy Pandora in a $3.5 billion all-stock deal, which will soon create the biggest audio entertainment company in the world. Under new parents and an aggressively remixed business model, Pandora is determined to be relevant again — if, that is, music fans are willing to take it back.
SiriusXM said Monday that it is acquiring Pandora in a $3.5 billion deal that aims to create an all-encompassing digital audio offering that will reach some 100 million users in their vehicles, in homes and on mobile devices. During a call with investors this morning, Jim Meyer, chief executive at SiriusXM, said many potential new listeners try out the satellite radio service when they get a new or used vehicle, but often do not become paying subscribers.
In the first half of 2018, overall on-demand streaming increased 41.7 percent to reach 403.5 billion U.S. streams, according to Nielsen Music. That growth defies mathematical trends, which dictate that, as a base enlarges, it becomes harder to achieve a bigger percentage growth than in preceding time periods.
After purchasing programmatic audio platform AdsWizz in March, Pandora has become a force in the market.
Pandora just entered the on-demand music subscription business, but the Oakland, Calif.-based company has been streaming songs for almost as long as Apple’s iTunes Store has been selling them.
Streaming services accounted for 51 percent of total U.S. music revenue in 2016 — about $3.9 billion — from a mix of paid subscription services (Spotify Premium, Apple Music), ad-supported services (free Spotify, YouTube), and internet radio (Pandora).
Now the app has a new trick: Its brand-new on-demand music subscription tier, built to rival Spotify and Apple Music, is layered seamlessly on top of its famous people-and-data-powered playlisting engine. Pandora Premium is here.