SiriusXM CEO Outlines Growth Strategy
"I’m pretty bullish on subscriber growth for years to come," said CEO Jim Meyer
SiriusXM Radio plans to be the dominant product in the connected car of the future, and CEO Jim Meyer expects that by the end of the decade about 70 percent of new automobiles in the U.S. will come with an embedded modem.
While satellite radio is not a two-way service, modems will allow for seamless on-demand content and other services that Sirius XM plans on being involved with, said Meyer, who was speaking at an investor-day presentation of parent company Liberty Media.
Earlier, Liberty Media CEO Greg Maffei worried about the impact Internet streaming could have on SiriusXM’s model, calling it “both a threat and an opportunity,” though Meyer was far more bullish.
SiriusXM is in 70 percent of new cars in the U.S., and by year’s end the service will boast 27 million paying subscribers, Meyer said. With 240 million cars in the country, there’s room for lots of growth, and the company is looking at expanding pricing options.
SiriusXM is also in a great position due all of its up-front costs early in its history. Therefore, even though it will record about $1.1 billion in earnings before interest, taxes, depreciation and amortization this year, the company doesn’t anticipate paying income tax until about 2018, Meyer said.
Maffei called SiriusXM “a truly appealing product” with “incredibly valuable in-car real estate.”
“I’m pretty bullish on subscriber growth for years to come,” Meyer added.
Also presenting at Liberty’s investor day event was Live Nation CEO Michael Rapino, who boasted that artists like Taylor Swift can earn $1.5 million per night while touring, much more than she earns from Pandora and Spotify streaming her songs.
The company’s Ticketmaster resale product, which only launched about a year ago, has already serviced $1 billion in gross transaction value, Rapino said.
Rapino said that Live Nation’s highest-margin business is advertising, and he noted that the company has streamed 125 concerts through its relationship with YouTube, accounting for 18 billion media impressions.