Audio entertainment giant SiriusXM, the home of Howard Stern, reported Thursday that it added 162,000 self-pay subscribers in its satellite radio unit in the fourth quarter, but expects a “modest” drop this year amid economic and car industry challenges.
SiriusXM also said its paid promotional subscribers decreased by 28,000 in the final quarter of 2022. In the year-ago period, it had added 55,000 self-pay customers and lost 286,000 paid promotional users.
The total gain of 134,000 subscribers in the latest period compared with a loss of 231,000 in the year-ago period. As of the end of 2022, Sirius’ self-pay subscriber base stood at 32.4 million, with its total users reaching 34.3 million.
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At its Pandora streaming business, the company lost 52,000 net self-pay subscribers in the final quarter of 2022, compared with a year-ago loss of 128,000. The company ended December with around 6.2 million total self-pay customers at Pandora.
The company’s quarterly advertising revenue dropped from $495 million in the year-ago period to $480 million. Monthly active users (MAUs) at Pandora were down to 47.6 million from 52.3 million in the prior-year period. Total ad-supported listener hours hit 10.9 billion, down from 11.5 billion, but average monthly listening hours per ad-supported user rose 4 percent to 20.6.
SiriusXM has been investing in and focusing on evolving the listening experience both in and outside the car and is planning to relaunch its app later in 2023. On a morning analyst call, SiriusXM execs said they would be “disciplined” on the company’s audio content spend to chase younger, more diverse audiences, but deeper cuts would be coming at the corporate level as the industry as a whole reacts to an advertising downtown.
CFO Sean Sullivan told analysts SiriusXM would “implement broader cost reductions” company-wide for better productivity, especially as it develops an updated SiriusXM streaming experience. Top execs also talked about their podcasting expansion after Spotify pointed to “more efficient spending” on the audio products to build podcast libraries and grow listenership.
“The economics on podcasting got a little out of hand, to say the least, and as you see the pullback is going on right now. It’s going to have its sea legs in general, but with us, we’re going to be very disciplined,” Scott Greenstein, president and chief content officer of SiriusXM, said of a more cautious stance on capital investment returns.
CEO Jennifer Witz told analysts SiriusXM was “really well positioned” in podcasting even as the audio format was experiencing growing pains as an industry, and CFO Sullivan added “we’ve got a fair amount of inventory and we have people that are interested in putting dollars there.”
Earlier in commentary that accompanied her company’s latest results, Witz said in a statement said: “2022 was a strong year for SiriusXM, as we continued to focus on bringing consumers the best in audio entertainment both in-car and on the go, reaching record high revenue and record low churn.”
She added: “Our strong operating and financial performance in 2022 are a testament to our resilient business model and growing contribution from streaming, which helped us deliver 348,000 net new self-pay subscribers. In 2023, we expect SiriusXM to deliver strong operating performance and generate significant cash, even as we face a challenging economic environment and continue to make material investments in our technology infrastructure.”
CFO Sean Sullivan warned in his own statement: “While we are not issuing subscriber guidance today, we anticipate modestly negative self-pay net adds for the year as economic and demand uncertainty persists, auto sales remain soft, and we reduce marketing ahead of our planned launch of a new streaming experience later this year.”
But he also noted: “SiriusXM met all of its financial guidance in 2022 — a notable accomplishment in a tough year.”
In pre-market trading, SiriusXM shares were down 1.9 percent.
