Audio entertainment giantSiriusXM, the home of Howard Stern, reported Tuesday that it lost 96,000 self-pay subscribers in its satellite radio unit in the third quarter, a narrowed decline after a 132,000 drop in the second and a 347,000 loss in the first quarter. In the year-ago period, the firm had added 187,000 such customers, though.
SiriusXM also added 2,000 paid promotional subscribers, after a year-ago loss of 49,000. That meant a total net drop of 94,000 subscribers in the latest quarter, compared with a gain of 138,000 in the third quarter of 2022 and a gain of 23,000 in the second quarter of 2023.The year-to-date satellite radio user drop as of the end of September stood at 336,000, compared with a gain of 138,000 for the first nine months of 2022.
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As of the end of September,Sirius’ self-pay subscriber base stood at more than 31.8 million, with its total users falling just below 34.0 million. Earlier in the year, the firm, led by CEO Jennifer Witz, had said that it expects a “modest” user drop for the full year 2023 amid economic and car industry challenges.
At its Pandora streaming business, SiriusXM lost 112,000 subscribers in the third quarter, compared with a year-ago loss of 52,000. Over the past year, the firm lost about 150,000 users. The company ended September with around 6.1 million total self-pay customers at Pandora.
SiriusXM, however, recorded quarterly advertising revenue in its Pandora and Off-Platform unit of $418 million, up 3 percent from the year-ago period and up 5 percent over the second quarter of 2023. In the second quarter, ad revenue had declined slightly. Monthly active users (MAUs) at Pandora reached 46.5 million in the third quarter, down from 48.8 million in the prior-year period. Total ad-supported listener hours hit 2.64 billion, compared with 2.75 billion in the third quarter of 2022.
SiriusXM reported overall third-quarter revenue of $2.27 billion, down slightly from $2.28 billion in the year-ago period. Earnings of $363 million, or 9 cents per share, rose from $247 million, or 6 cents per share in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), another profit metric, rose 4 percent to $747 million.
SiriusXM plans to unveil at a press event next week a new streaming app, which is designed to attract younger, more diverse audiences and offer better search recommendations and other features.
Witz told analysts during a pre-market conference call that the new streaming experience will eventually be the “cornerstone” of the company’s long-term strategy, while in-car subscribers drive near-term growth.
“We are confident that the launch later this year of our new streaming products brand platform and enhanced marketing capabilities will us put on a path for continued improvements in subscriber acquisition and retention as we move through next year,” Witz said of the increasing out-of-car personalization and mobility of the upcoming SiriusXM streaming app and other next-generation products.
That streaming product shift will also impact the new content mix at SiriusXM. “We have the content, largely, we believe we need to have to address these audiences. It’s just difficult for them today to discover and navigate and to some extent control the content in the product,” Witz argued as younger audiences look to popular music content already available on Spotify and Apple Music and a user experience well beyond just getting into a car and turning the music dial.
Also helping target a younger market is the launch by SiriusXMandTikTokofTikTok Radioas a full-time music channel. “TikTok Radio also continues to be a great success for us in delivering content that resonates with younger, more diverse listeners. We’ve built out an incredible roster of TikTok influencers that host the channel, and this past quarter continued to deliver different formats in how we package and present viral music through these personalities,” Witz said on the analyst call.
The SiriusXM boss also pointed to the overall ad market remaining “soft” and reiterated her previous projection that the year would close “relatively flat versus last year,” with a recovery in the ad market likely to come in 2024 after one was earlier predicted for this year.
“We remain focused on further scaling our advertising offering, and we expect the relaunch of the SiriusXM platform to drive increases in our SiriusXM digital monthly active users over time, opening up new opportunities within our growing advertising business,” Witz added.
SiriusXM CFO Thomas Barry told analysts a special committee of the company’s board was weighing a proposal from Liberty Media to combine the Liberty SiriusXM tracking stock group with the satellite radio giant to form a new publicly traded company.
