When satellite radio launched more than 22 years ago, it was heralded by the press as “space invaders,” the shiniest new object on the media block beaming commercial-free music from outer space. Now, with subscriber growth stalling and a need to attract younger audiences, SiriusXM is transitioning to a more digital future.
On Nov. 8, it will release details of its relaunched streaming platform during a press and industry preview event. Management offered few details during its quarterly earnings call Tuesday, although CEO Jennifer Witz said that they see the pivot toward digital delivery, rather than a service that relies on multimillion dollar satellites circling the Earth, as not only a more profitable business, but one that better meets today’s consumer demands.
“The new streaming apps will certainly help us address demand with younger audiences,” she said. Witz told analysts that it will also allow SiriusXM to move faster to address what they want to listen to. “Younger generations represent a reasonably significant size of our in-car funnel, as well as our streaming funnel – we now just need to better satisfy their needs once they get there,” she explained.
The goals are to better capture consumer demand for the company’s human-curated audio service, attract younger and more diverse listeners, and position it for the future. The company is launching new apps for iOS and Android, which will also have updated CarPlay and Android Auto integrations so they can be used in or outside the car.
“We can move faster in the streaming apps to start there to make sure that we have a very effective product market fit for our growth segments, which we've identified to be about a quarter of the overall adult audio listening market,” Witz added. “They are looking for premium audio experiences and beyond what an on-demand music service might provide.”
Witz said they already have the content they believe is needed to attract these audiences. “It's just difficult for them today to discover and navigate and, to some extent, control the content in the product.” The chief pain points the company is trying to solve have to do with discovery, control, and pricing.
In addition to new tech advances, SiriusXM also plans to improve its marketing and content. “We are confident that the launch later this year of our new streaming products, brand platform, and enhanced marketing capabilities will put us on a path for continued improvements in subscriber acquisition and retention as we move through next year. This launch is just the beginning of a series of innovations in our products, marketing, and content that we expect will only accelerate in the coming years,” Witz added.
While streaming is central to SiriusXM’s future growth, the in-car experience continues to drive its business. Yet there are technological advances there. Later this year its 360 platform will debut in Android Auto, which Witz predicted will become the dominant dashboard operating system. It will feature content recommendations as soon as someone starts their car. “Recommendations, whether it's in 360L or in our apps, is one of the core features to enhancing subscription value and retention,” Wiz said.
Chief Content Officer Scott Greenstein told analysts that he expects sports content to be one of the places that SiriusXM will have one of its biggest streaming opportunities, but said they also have plenty of music ideas as well, saying it will give the company an unlimited opportunity to offer artists a shot at being a guest DJ. “But whether it's comedy, music, politics, there's nothing that doesn't have a younger component to it,” Greenstein said.