In the recent Q2 earnings call from Sirius XM, we heard a measured bullishness about the audio giant’s podcast business, including a key bragging point of interest: CEO Jennifer Witz noted that the first half of 2023 booked over 2,600 podcast campaigns across more than 100 Fortune 500 brands.
Jennifer Witz, Sirius XM CEO
“We are now starting to see the true potential of our podcast business as it reaches scale,” she declared, “with continued room for long-term growth fueled by increasing advertiser demand, expansion of our ad tech solutions, and the long tailwind from greater consumer adoption.”
Speaking of advertising generally, Witz noted that the company is testing AI tools. “We are also currently in testing with a new suite of AI advertising tools that will help us optimize campaigns from planning through execution.”
Sirius XM’s consumer offering recognizes three use cases: satellite, podcast, and streaming. Podcast and streaming represent the “off-platform” reporting structure, and we learned of a thirteen percent year-over-year growth in off-platform revenue. Subsidiary Pandora’s gross profit in Q2 was $152 million, down 9% year over year but up 37% quarter over quarter with a margin of 29%.
According to one report, Pandora’s MAUs (monthly active users) were 47.4-million in Q2, down from 50.5-million in the year-ago report.
“The growth of podcasting is making a significant contribution to the overall ad revenue.” Tom Barry, Chief Financial Officer, Sirius XM
Chief Financial Officer Tom Barry voiced an interesting statistic of cross-platform success: He noted that 17 of the company’s top 20 advertisers bought into two of the three channels.
There is also a stability story for podcasting, which speaks to a media category whose star performers tend to remain at the top. Along that line, we heard from Scott Greenstein, President and Chief Content Officer: “The overall view is [that] podcasting has remained relatively stable in terms of what’s working. So, for instance, the top 10 in podcasting and top 20 largely has the same podcasts it had at least a year ago.”
Greenstein seemed open to new acquisitions in the podcast space. “We can be a player in that market, given our financial position,” he said.
One post-Covid note: Sirius XM has reduced its real estate footprint by 38% compared to pre-Covid floor space.
