Sirius XM Sees Pandora and Other Free Online Music Providers as 'Absolutely Competitive'
Sirius XM Radio CFO David Frear said that Pandora and other providers of free music online are "absolutely competitive," but that the satellite service isn't interested in acquiring one of the services.
"There are absolutely no barriers to entry in Internet radio," Frear said at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco on Tuesday.
Frear, though, said that Sirius XM is a "curator" of music, along with news, talk and sports, and thus it is more valuable to people with busy lives than is a mere Internet provider of free music.
He noted that 100 million people have smartphones in the U.S. and many can easily play songs stored on them through a car stereo system, yet they choose not to.
Free music is "a fact of life," frear said. "If there were a disruptive technology impact to our business we would have seen it already."
Frear also said that there are 40 million new cars equipped with Sirius XM and predicted 100 million by the end of the decade, suggesting a big growth opportunity for Sirius XM, which finished the year with 21.9 million subscribers.
He said he is "encouraged" by new-car sales in January and February. "We've got a little wind at our backs," he said.
Frear also said that a recent price hike that increased the cost of the basic service from $12.95 to $14.49 has been well received by consumers because it was a "straight forward, clean story."