Sirius XM has released its third-quarter financial and audience data. The satellite radio company posted quarterly earnings of $167 million, up 22% year-on-year. Revenue rose 11% to $1.17 billion, marking a third-quarter high for the company.
Subscriber figures for Sirius XM also showed positive growth. The company reported 525,000 net subscriber additions for the period, up from 433,000 net new subs in the same period of 2014. As of the end of September, Sirius XM reported 28.96 million subscribers. The company projected about 2 million new subscribers total for the year, up from its earlier goal of about 1.8 million subscribers. Sirius XM’s third quarter performance continues the momentum from Q2, which also saw steady growth.
As often is the case, some of the most interesting parts came during analyst Q&A.
TuneIn’s new service
A representative of Deutsche Bank Securities asked about the competitive threat of TuneIn’s new premium subscription service, in which Major League Baseball and National Football League games are broadcast. That question proved provocative, and received four answers from three Sirius execs. CEO James E. Meyer sounded blithe when he said, “I’m not particularly focused on TuneIn right now.” A bit later, though, he allowed some displeasure to enter the discussion: “To be clear, I would prefer these guys [e.g. TuneIn] didn’t license [the sports organizations]. But I understand why they did. It doesn’t make me happy, but it’s what they do.” He also noted that Sirius XM has a range of additional sports programming beyond play-by-play of games.
What about Apple Music?
It’s natural to expect a question about Apple’s newly launched (June 30) interactive music services, which contains a radio component, Beats 1, which has received some good reviews as the most interesting part of Apple Music. An investor from Morgan Stanley said “We’re all trying to figure out the demand in the U.S. market for interactive on-demand listening, versus broadcast radio. Do you take much from what you see in the market from competitors and inform how you think about the strategic direction of your company?”
James E. Meyer noted Apple’s recent revelation of subscriber numbers: “I don’t think 6.5 million is a trivial number, but I have no idea how many of them are in the U.S. and what they’re made up of or anything like that.” He said this about the general threat of streaming, and the company’s streaming plans: “I think streaming is a technology, not a competitor, and I think streaming will be a fundamental part of what we offer our subscribers over the next decade. I think frankly it has as much benefit to us as anybody.” He observed in passing that streaming could yield more data about how users consume Sirius content, than over-the-air listening does. “I’m excited about the connected world, not afraid of the connected world,” Meyer said.
Extending his ruminations to Pandora, James E. Meyer observed that even when streaming market leaders grow rapidly, broadcast radio maintains enormous reach. On this point, he cited Pandora: “For instance Pandora, their growth in listenership over the last five years, seven years has been extraordinary. And yet when you add it all up, there are still 230 million people in this country listening to terrestrial radio.”
