SiriusXM Adds 210,000 Satellite Radio, 33,000 Pandora Subs, Touts Marvel Podcasting Deal

Cindy Ord/Getty Images for SiriusXM
SiriusXM CEO Jim Meyer

The home of Howard Stern, led by CEO Jim Meyer, reports a quarterly record for Pandora advertising revenue.

Audio entertainment giant SiriusXM, the home of Howard Stern, on Thursday reported continued growth in its satellite radio and Pandora subscribers.

In the third earnings report since the company, controlled by John Malone's Liberty Media, closed the $3.5 billion acquisition of music streaming service Pandora Media, SiriusXM said it added a net of 210,000 satellite radio subscribers. It ended September with more than 34.6 million subscribers, including more than 29.6 million self-pay subscribers. "Paid promotional subscribers decreased due to declines in shipments from automakers offering paid promotional subscriptions," the firm said.

Pandora added 33,000 net new self-pay subscribers in the third quarter to end it with nearly 6.3 million self-pay subscribers. "In the third quarter, a one-year paid promotional subscription trial with T-Mobile ended, resulting in approximately 700,000 paid promotional trials being retired," the company reported. "This brought total Pandora subscribers to over 6.3 million at the end of the period, which included a paid promotional subscriber base of 45,000."

Ad revenue at Pandora reached a quarterly record of $315 million, up 8 percent over the third quarter of 2018. "Ad revenue was driven by strong third-quarter monetization of $85 per thousand hours, growing 10 percent over the third quarter 2018," the firm said. "Strength in traditional audio advertising, boosted by video programmatic and engagement-based video, as well as the expansion of off-platform efforts and fees generated on the AdsWizz platform, drove revenue growth." Total revenue for Pandora rose 7 percent to $447 million in the quarter, thanks in part to a 5 percent increase in subscriber revenue to $132 million.

SiriusXM's earnings fell to $246 million in the third quarter, compared with $343 million in the prior-year period, primarily driven by refinancing expenses associated with the firm's July redemption of debt and non-recurring tax benefits in the year-ago period. Third-quarter revenue rose 7 percent when adjusting for the Pandora acquisition, to $2.0 billion.

The company has also been expanding its video content, led by Stern. CEO Jim Meyer said recently, "You guys should expect more and more video to roll out now over the remainder of the year." He also emphasized, however, that SiriusXM is "not going to get into the television business or the movie business. That's not what we do. Our video will be all about enhancing the audio experience" and boosting user engagement.

Said Meyer about the latest quarterly results: "Total net additions benefited from continuing strength in the auto sector, and our adjusted earnings before interest, taxes, depreciation and amortization hit an all-time quarterly record of $657 million."

He also touted the recent opening of the company's new Hollywood studio complex, which featured a series of shows by Stern. "Howard is at the top of his game and was welcomed to L.A. by an array of stars and special live performances by Adam Levine and Green Day, all from our state-of-the-art street-level performance space we call the Garage," Meyer said. "Howard's broadcast followed a month of special shows, interviews and performances in L.A. exclusively for us by Carrie Underwood, Julia Roberts, Dave Matthews and breakout artist Billie Eilish, to name a few. Re-establishing ourselves in the entertainment capital of the world, and being closer to compelling talent and brands, bolsters the value of our programming for our subscribers."

On an earnings conference call, Meyer said the company is "completely reimagining" the offerings of SiriusXM and Pandora with a focus on content that is "differentiated from and superior to other offerings in the audio market," including more future collaborations with "mega-stars."

He also touted the "additional scale" of the merged SiriusXM-Pandora, which he said helps the firm "to attract and promote new content." And he again lauded the firm's growing video offerings, led by Stern.

Meyer also mentioned podcasting as another opportunity for upside, citing a chance to curate and bring more content, as well as better advertising technology and targeting to the growing podcasting space. "Most podcast advertising is very rudimentary and not personalized," he said. "Frankly, this area is ripe to be disrupted and improved."

In the context of podcasting, Meyer also touted SiriusXM's recent deal with Walt Disney's Marvel for exclusive Pandora and SiriusXM podcasts. "This pivotal deal neatly illustrates our podcasting approach," he said. "We care about quality, and we always love to associate with the best brands first and foremost. People don't just want more, they want what is compelling. Marvel creates fantastic character-driven storylines, and their record of success is unrivaled."