SiriusXM CEO Touts Pandora Deal, Video Strategy as Quarterly Results Improve
The satellite radio firm and home of Howard Stern expects to close the acquisition of the music streaming service Friday and expand the video content it offers.
Satellite radio giant SiriusXM, home of Howard Stern, on Wednesday reported improved fourth-quarter financials and continued growth in subscribers before touting the acquisition of music streaming service Pandora Media, which CEO Jim Meyer said his team expects to close Friday.
SiriusXM last year agreed to acquire Pandora in an all-stock deal valued at about $3.5 billion that will create the world's largest audio entertainment company. Pandora shareholders approved the deal Tuesday.
During Wednesday's earnings conference call, Meyer said SiriusXM will "hit the ground running" after the deal close and highlighted cross-promotion opportunities, including the chance to monetize more of the roughly 23 million SiriusXM trial users a year. Saying that the North American audio market is the most influential in the world, he said the combined firm will also provide a "powerful promotional platform" for content creators and advertisers.
"Together, the SiriusXM and Pandora brands are uniquely positioned to lead a new era of audio entertainment by delivering the most compelling subscription and ad-supported audio experiences to millions of listeners — in the car, at home and on the go," Meyer also said. "I'm incredibly excited by the opportunity that sits in front of us to build a media company that will be competitive for decades to come."
SiriusXM's evolving video strategy was also in focus on the call, with Meyer saying that Howard Stern will expand his video offerings, while the company will start offering video content "beyond Howard" later this year. He explained that new video offerings would "showcase the best of what we do at SiriusXM," including performances, town halls and guests coming into the studio. The expanded video content will be "another way to give additional access and value" to subscribers, he argued.
Asked about the impact of the video programming that the company has made available from Howard Stern's show, Meyer said it has helped to further boost engagement of an already highly engaged fan base. "He is very excited" about the video push, Meyer said about Stern, adding that the two spoke about it three weeks ago.
SiriusXM said early Wednesday that it added a net of 346,000 subscribers in the fourth quarter, ending 2018 with more than 34 million subscribers.
The company, controlled by John Malone's Liberty Media, reported quarterly earnings of $251 million, or 6 cents per share, compared with a loss of $37 million, or 1 cent per share, in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization, another profitability metric, rose 6 percent to $576 million. Quarterly revenue increased 7 percent to $1.5 billion.
"SiriusXM had a strong finish to 2018, a year that saw our ninth consecutive year of one-million-plus net subscriber adds and our lowest full-year churn rate in the past decade," said Meyer. "We have set even more ambitious goals for the company to continue growing in 2019."