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Audio entertainment giant SiriusXM, the home of Howard Stern, on Thursday said it added self-pay subscribers in its satellite radio and Pandora businesses for the second quarter, the first one that was fully affected by the coronavirus pandemic.
The company, controlled by John Malone’s Liberty Media, said its satellite radio subscriber numbers fell when including promotional subs, just like had been the case in the first quarter. In the year-ago period, it had added a total of 174,000 net users.
In the latest period, SiriusXM added 264,000 self-pay customers, but lost 768,000 promotional subs to end June with 30.3 million self-pay and 34.3 million total users, down 516,000. “Paid promotional subscribers decreased due to declines in shipments from automakers offering paid trial subscriptions with the purchase or lease of a vehicle,” the company said.
For the full year 2020, the company on Thursday forecast it would add about 500,000 net SiriusXM self-pay subscribers.
Meanwhile, music streaming service Pandora added 40,000 net self-pay subscribers in the second quarter, compared with 64,000 in the year-ago period, to end June with more than 6.3 million total such users. Monthly active users at Pandora came in at 59.6 million in the second quarter, down from 64.9 million in the prior-year period.
Advertising revenue at Pandora fell 31 percent to $211 million in the latest quarter. “Numerous categories of advertisers canceled or paused orders during the second quarter in reaction to the COVID-19 pandemic,” said SiriusXM. At the same time, revenue declines were most marked earlier in the quarter, and eased into May and June.
SiriusXM on Thursday reported total second-quarter revenue of $1.9 billion, down 5 percent from the same period in 2019. Earnings of $243 million fell 7.6 percent from $263 million.
CEO Jim Meyer told analysts during a morning call that SiriusXM’s business model had been resilient during the pandemic, with improving results and visibility into the remainder of the year. “We are poised for a strong finish to the year, despite the uncertain economic outlook and rising COVID-19 cases in parts of the country,” he said.
Restoring SiriusXM’s full-year 2020 guidance, Meyer predicted the company would add around 500,000 self-pay net subscribers and reach total revenue of $7.7 billion.
Meyer also gave an update on contract renewal talks with Howard Stern, which got started late last year, before being slowed down by the pandemic. Those talks have recently picked up pace, ahead of Stern’s current five-year contract lapsing at the end of 2020. “Howard is very happy with what he’s doing. It matters when Howard is happier. His show is better, and he’s more relaxed. I’ve been clear: I want Howard Stern to work at SiriusXM for as long as Howard Stern wants to work,” Meyer said, noting it mattered whether Stern wanted to keep doing his live shows, or instead decide to retire.
“I know what Howard wants. And we’re trying to figure out a way to make all those things work together. I don’t want to be overly optimistic here, but I want Howard here. … We’ll keep working and we’ll get there, I hope. At the end of the day, it will come down to what Howard wants to do,” Meyer added.
In the event that Stern steps away from his live shows, SiriusXM will retain the rights to his library for seven years and will keep airing them. “That’s not what I want. I want Howard on air,” Meyer insisted.
CFO David Frear told analysts that SiriusXM remained intent on acquiring and investing in complementary businesses, after putting $428 million of capital into acquiring Simplecast and Stitcher and for a minority investment in Soundcloud.
Meyer touted the latest acquisitions for advancing SiriusXM’s position in podcasting, as it added to its leadership in audio entertainment. “Simplecast, a leading platform for podcast creators, strengthens our capabilities in content management and analytics, as well as provides leading ad technology tools for publishers and advertisers,” he told analysts.
Meyer added the podcast business was in its early innings and content was about driving the value proposition for SiriusXM and Pandora subscribers: “And that’s going to be a wide variety of content and I don’t believe any one particular one or two or three titles is going to drive that.”
6:00 a.m. Updated with comments by SiriusXM execs during an analyst call.
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