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Audio entertainment giant SiriusXM is disciplined in its content spending, but willing to pay for attractive programming, CEO Jim Meyer said during a virtual investor conference on Tuesday.
Appearing at the virtual Goldman Sachs Communacopia Conference, he was asked about the firm’s roughly $460 million content spend in 2019, or 6 percent of revenue, in addition to $1.7 billion in music royalties. Meyer said programming costs have risen a bit, and it was “reasonable to say that is what I continue” to see going forward.
“We are very disciplined here,” the SiriusXM CEO said, but emphasized: “If we see compelling content … a piece of content that can significantly drive either retention or acquisition, we are going to get it.”
Asked what would happen if John Malone’s Liberty Media, which owns a majority stake in SiriusXM, reaches an 80 percent ownership, Meyer said: “As we approach 80 percent, which would be natural (if Liberty keeps not participating in stock buybacks), our board is very skilled in what that means … and we’ll watch it closely.” Asked about Liberty possibly reaching a 90 percent stake, Meyer said the board has been advised of a possible “squeeze-out” of minority shareholders, but said “those are two very different plateaus that need to be dealt with differently.”
The firm said earlier in the day Meyer would retire from the CEO post at the end of the year to take on the vice chairman role, with Jennifer Witz set to succeed him as CEO.
SiriusXM last week raised its 2020 subscriber forecast. It now expects full-year self-pay subscriber net additions of approximately 700,000, up from 500,000. The company reiterated its financial guidance for the year.”Our business continues to demonstrate strong performance and favorable trends” following the initial hit from the novel coronavirus pandemic, CEO Jim Meyer said about the higher subscriber projection. “It’s clear that demand for SiriusXM remains strong – quite simply, consumers continue to find immense value in our unique audio bundle and all of the entertainment and information it provides.”
The company explained that improving new car sales and a rising new car penetration rate also provide the firm with a “robust trial funnel that we believe bodes well for the coming quarters.”
Meyer has held talks with Howard Stern about a contract renewal as the star’s current five-year deal expires at the end of 2020. Stern has been on SiriusXM for 15 years. “I am sure that every penny we paid Howard our shareholders have economically benefited from,” Meyer said last week. He added that he was “personally deeply engaged” in conversations with Stern’s team and was “very optimistic” about them. “We continue to make progress.” Management has signaled an update on the deal could come around its third-quarter earnings report.
SiriusXM is controlled by John Malone’s Liberty Media.
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