As iTunes announces their streaming radio service to launch this fall, Pandora continues to make deals that put their service in the dashboard, where they can continue to expand audience. According to wsj.com yesterday, Pandora will be available and installed in one-third of new cars sold in the US this year.
That impressive stat brings the streaming service a lot of new listeners – Pandora says they have seen more than 2.5 million unique activations through integrations from the 23 major automotive brands and eight aftermarket manufacturers they are installed with.
Meanwhile, the popularity of streaming and the connected dashboard is not being overlooked by Sirius XM. Despite deals that already have their satellite service installed in a long list of vehicles. Sirius XM has been improving its streaming offering of late, and just announced a deal with Ford that will pair both its satellite and online radio offerings in new Ford cars with Sync AppLink.
Meanwhile, tuner platforms like TuneIn and Aha Radio both have integration deals with auto manufacturers as well, and folks like me connect just using their smartphones. Audio options in the car are expanding, and the big services have taken note. Is the next new thing an iTunes radio in your dashboard? If so, it will likely be one that will sync with your iPhone…
Yesterday SiriusXM launched their new personalized streaming platform MySXM, a streaming option available to its subscribers for an add-on fee. The service features 50 channels that can be adjusted using “slider bars” to suit the listener’s personalized tastes. It’s described as more interactive than Pandora, with on-demand features that go beyond what Pandora offers. Backend music intelligence platform The Echo Nest provides the service with its personalization, and Omniphone provides cloud based services.
Make no mistake, SiriusXM is still a satellite company, and this new offering is all about protecting its subscriber base. With an estimated 120 million folks in the US listening online in the past month, streaming is the fastest growing radio platform. Offering that as an option is a way to preserve its subscriber base.
According to year end reports, SiriusXM had close to 24 million subscribers at the end of last year, while Pandora has 200 million subscribers, 70 million of whom are actively monthly users. SiriusXM does not provide information other than subscribers.
While the connected dashboard is a concept that holds lots of promise for streaming stations, it’s no secret that it poses a point of concern for platforms that already own the dashboard real estate – like broadcast and satellite. Last year Sirius XM added 2 million net subscribers, and a lot of those came from folks who bought cars with the product already installed. That’s a big source of new audience for Sirius XM. While the streaming industry is busy declaring victory with every new car that integrates Pandora, iHeartRadio, Aha or TuneIn, Sirius is busy thinking about protecting its turf from the new dashboard.
Enter MySXM, the satellite company’s streaming option for listeners. CEO Jim Meyers positions the new streaming platform as a defensive move, pointing out that SiriusXM will have an advantage by offering both satellite and IP options in the dashboard. “Listeners also don’t need to constantly lean forward to create a tailored listening experience. They can just tune to the music channels they already like and adjust the channel’s unique slider controls and set them once for good or change them any time they want….This new feature will further enhance our IP offering, which has been greatly improved over the past year and now includes the ability to time shift up to five hours on many stations, start songs at the beginning when tuning to a music channel and the ability to play thousands of hours of talk and entertainment from over 300 shows from our library of on-demand content.
Though there is no official launch date for MySXM yet, information from the call yesterday was that the platform will be available across all platforms and devices.
Zoe Keating is an independent musician who has an independent opinion about the Internet Radio Fairness Act that’s worth listening to. She says that almost every day someone asks her what she thinks of it, so after doing a lot of thinking she took the time to write a really great post on her tumblr about it all. First let me say that I try hard not to overdo it with discussions of royalties here on my blog because I think that others do a better job writing on that topic, and frankly, it’s a little dry for me. So I was charmed to read this on Ms Keating’s post:
“The subject of internet performance royalties is not only mind-numbing and very hard to focus on, especially when you have a toddler attached to your leg, but it is also joyless. It’s not rocket science, but I think rocket science would be more fun.”
Amen. Nonetheless, she perseveres, and comes up with some great thoughts that are not the usual gibberish that musicians spout after being prepped/educated by their record labels.
First of all, Ms Keating wants to know why the Internet related royalty payments that she receives are so hard to figure out. For example, she says she gets statements from SoundExchange that don’t even tell her anything about how many people have listened or how many plays she’s getting paid for. And she’d like to know that. In fact, she’d rather have that information than money because she recognizes that it would help her know her audience: “I wish I could make this demand: stream my music, but in exchange give me my listener data. But the law doesn’t give me that power. The law only demands I be paid in money, which at this point in my career is not as valuable as information. I’d rather be paid in data.”
After a really long and logical explanation of what she gets paid in royalties and what she thinks would work, Zoe Keating comes to this wonderful conclusion:
“we should make royalties equitable and fair for every kind of service: internet radio, satellite, commercial terrestrial radio. On the internet we can determine how many people are listening…In essence, let there be One Royalty Rate To Rule Them All and get rid of the percentage-of-revenue system (unless a broadcaster is non-profit, or maybe even during a well-defined start-up period)… I think this means internet royalty rates will need to come down (although not as much as proposed), and satellite and terrestrial will come up.”
All that, and she can play too…
Sirius XM grew their subscriber base by 8% last year – from 20.6 million subscribers to 22.3 million. First quarter 2012 revenue meanwhile grew at an even more impressive rate of 11% to $805 million. That puts them ahead of the largest broadcaster Clear Channel Radio‘s $672 million. For this year, they are forecasting revenue of $3.3 billion, compared to Clear Channel Radio’s $3.0 billion.
What’s even more impressive is the way they are monetizing their listener base. They make close to $138 per listener/subscriber per year against Clear Channel’s $12.55 (and Pandora‘s $5.84). Sirius XM sure makes the subscription model look attractive. In fact, they have the same number of subscribers as Comcast. They’re projecting household penetration of 13% by the end of this year.
Meanwhile, as I have mentioned before, Sirius XM continues to expand their offerings online. They recently announced a suite of enhancements for their online offering that will allow listeners to pause, rewind and skip, start shows and songs at the beginning, set alerts and record programming. These features will give Sirius XM listeners a highly interactive online listening experience. They’re also redesigning their player and rolling out new mobile device apps.
Sirius XM’s subscriber base is huge, and their ability to monetize it is impressive. While lots of media attention is focused on Pandora, Spotify, Clear Channel and others, when it comes to assessing the new audio marketplace, Sirius XM is the elephant in the room…
SiriusXM will introduce a suite of very interactive features to its Internet radio offering later this year, they announced yesterday. The new offering looks to be designed specifically to compete with offerings by Pandora. Other platforms, such as iHeartradio, have been moving in a similar direction as well, creating personalizable channels and interactive features.
The features sketched out by SiriusXM are extensive in terms of their interactivity – listeners can go back up to 5 hours to select programming, pause their listening and pick up where they left off, replay or skip a song, and organize their listening on a single screen. In addition, Tune Start™ will automatically start the currently playing song from the beginning so listeners will hear the whole song when tuning to any music channel. These features will be available on their Internet Radio App update for Android smartphones and tablets starting later this year.
The new personalized radio stations will not have commercials, and will be available to SiriusXM subscribers who have streaming included in their listening plans. Pandora’s Pandora One service offers listeners the chance to pay a monthly fee for ad-free listening.
SiriusXM CEO Mel Karmazin’s comments on these new features tried to make light of the emphasis the satellite radio company is placing on competing with other online stations like Pandora. But these new features are innovative and sure look like an attempt to shift some of their listeners over to online listening – perhaps before they shift away from SiriusXM altogether. The rapid adoption of smartphones and spike in mobile streaming have no doubt caught the eye of the execs who understand that that’s a real threat to their listener base.
“In the not-too-distant future, a car with a radio that receives only AM or FM will qualify as an antique.” So says a WSJ article covering a new study released by Deloitte on Generation Y’s automotive buying power and preferences.
The study finds that 59% of 19 to 31 year olds place in-car connectivity as the top interior feature when shopping for a new car. This year one out of every four persons in that age group will buy a new car, almost half of them will purchase new or used in the next two years.
That’s driving heavy interest in tuners and platforms that are app ready and adaptable to safe car use. Pandora, TuneIn, iHeartRadio, NPR and others are working with auto manufacturers to place their apps in the cars, as is SiriusXM. Leading the way, Pandora has deals in place with almost 2 dozen auto manufacturers already.
I think there’s a short term and long term view to all of this and long term my money is on all-in aggregators like TuneIn who provide access to anyone who wants to be listed in their directory. If you are a car manufacturer, isn’t that what you would want to offer? I’m thinking that’s what buyers will want to buy.
Sirius XM has been streaming its programming and offering it as an add-on of $2.99 for subscribers to the satellite music service. Apparently that has been going well because now Sirius XM will enhance that service by adding programming that is not available via satellite to their streaming platform, including BBC Radio 1, programming that just last week was cancelled by Sirius XM as a satellite channel.
Rather than discontinuing its relationship with BBC Radio 1, Sirius XM is clearly using the channel to build more audience online. It will time shift the live programming to enable US listeners to listen in the same daypart that the programming is intended for. Sirius XM will also expand its coverage of BBC Radio 1’s programming and will also broadcast concerts from the extensive and wide-ranging BBC Radio archive, many of which are not commercially available. by artists such as Led Zeppelin, U2, Lady Gaga, AC/DC, Pink Floyd, Duran Duran, Queen, The Cure and other music legends.
“We are happy to continue our valuable relationship with the BBC and thrilled to now be able to give our listeners access to BBC Radio 1 programming on our expanding internet platform as well as deliver special concert performances to a variety of our satellite radio channels. The additional programming ranges from legendary music icons to today’s rising stars whose exclusive performances for the BBC are featured regularly,” said Scott Greenstein, President and Chief Content Officer, SiriusXM.
In addition to adding BBC Radio 1 to its online offerings, Sirius XM will now offer other channels online only as well, including The Groove, CSpan, Neil Diamond Radio, Simon & Garfunkle Radio, Rosie radio, and more.
While this all kind of leaves me scratching my head, I think it’s safe to draw the conclusion that streaming is going well for the satellite broadcaster. How well is anyone’s guess, but it sure looks to me like they’re interested in keeping more than a toe in the Internet radio game…
Things aren’t looking so bad for Sirius XM these days. They finished 2010 with more than 20 million subscribers, and renewed their contract with Howard Stern, and managed to report profits for most of last year. And while the crisis isn’t over – they still have plenty of debt to worry about – the skies seem to be brightening.
In part, they can thank Pandora for that. Pandora, who filed papers last week as a first step in their move to go public, is raising awareness of and interest in new radio technologies. And while Sirius XM isn’t really an Internet radio company, they have a substantial presence online, and could certainly head in that direction.
Actually, I’ve begun to wonder if they haven’t already – they just announced a new deal that puts them on Sonos Internet radio devices along with Pandora and others. They’re working on a new platform for Android, they’re already on iPhone. They are already in the Internet radio game – and getting an extra $2.99 a month for it from their subscribers.
Pandora’s impressed a bunch of folks with their stats – 80 million registered users is an impressive number. But we know from the filing that less than 10% of them are paying customers – and while Pandora is watching ad dollars flow in, they have a big job in front of them in turning all those listeners into advertising revenue. Pandora’s subscribers listen to ad-free music streams.
Meanwhile, Sirius XM has reported that they have more than 20 million subscribers as of the end of 2010. Who are both paying to listen AND listening to commercials. Auto sales are on the upswing, and Sirius XM gains subs from that as well.
Analysts are liking Sirius XM, and I have to say their business model is starting to look somewhat sound…