Pandora: The Latest Threat to Sirius XM
Those who love Sirius XM think that all of these “free” internet radio companies are no threat to the satellite radio business but, is that really true?
Top dog Pandora now has 27 million registered users and is growing strong to the tune of 50,000 new users per day. How does that growth rate compare to what Sirius XM has been pulling in lately? It doesn’t. How happy would investors be if SIRI was adding 1.5 million new users per month… it is probably safe to say that most would be happy if they added that many for the entire year of 2009.
The founder of Pandora also thinks that about 18,000 new subs per day can be attributed to their iPhone application alone. That being said, Pandora has been one of the top 20 downloads at the iPhone store since it was launched so, this should come as no surprise. This silver lining is that the potential for Sirius XM is still there but, the new Sirius XM iPhone application needs to be sexy, it needs to get to market quickly, and it needs to be FREE if they ever hope to hit the 5 million download mark recently reached by Pandora.
Will Pandora continue to be a threat in the years to come? They, just like Sirius XM, will always have to deal with with those pesky royalty issues but, founder Tim Westergren is confident that revenues will double this year and he doesn’t seem to see any reason why the company should not be profitable in 2010. It seems to me that for the time being, Pandora is here to stay.
[via Mashable]
Also, I don’t know that I can handle another article talking about the iphone… It’s not even here yet. Probably won’t be here for a while. Knowing Sirius it won’t be here for a looong while.
Well, all I can say as a SIRI stockholder is that I hope that this data embarasses Mel and company. I hope the embarassment leads to quick action. I think SIRI will do fine. However, it seems like Pandora, Slacker and all other competing companies are pushing siri out of the way. They should have let Nicemac go to market. Now, months later, we are still waiting.
However, SIRI does have the automarket cornered, for the time being and auto sales will improve. If they don’t protect themsleves and quit giving away market share, they will be the next GM (again).
If you are selling a Sportscar, but you are giving away a bicycle, you will give away much larger number than you will sell. Does the bike get you from point A to point B like the sportscar? Yes, but there will always be a large market for those who want the bells and whistles of the sportscar. So, can you get music on both Pandora and Sirius? Yes. Is Pandora FREE? Yes. Do you get the unique content? No. I would be interested to know of all the Sirius users, how many of them just listen to music and how many of them pay money for it because of the content. That number is what will represent the real opportunity loss to a company like Sirius against a give-away product like Pandora. As you make the points you make, please just include this type of data as well so that less informed readers will understand the differences in a give-away vs content differentiators. I agree on all the points in general though.
Bicycles do not cut into the auto industry like internet radio cuts into the internet radio that Sirius XM offer. I see your point but the analogy is not the best. There is a HUGE jump between a bike and a car, while the jump between Pandora and Sirius is MUCH smaller.
not really, does pandora do live cnn content in the woods of upper michigan?
at least the bike would still get you home.
pandora to sirius xm is more like a fighter jet to a big wheel
obviously pandora being the big wheel
Hey, you from da U.P.?
My family has property in the UP Houghton/Hancock.
I don’t know why people are comparing # of downloads between something that is free and not. Of course there will be more downloads if it is free. However, that does NOT mean that satellite radio has no value or no place in society. Content and commercial free radio is what differentiates satellite radio from terristoral radio. There will be a segment of people that are willing to pay for satellite radio. Numbers have shown this. 15.4 MILLION people and counting. This IPhone app will NOT be the savior of SIRIUS XM, and it doesn’t have to be. The IPhone app will suplement revenue while the auto sector regains its strength. And once that goes, watch it. SIRI will go off the roof!
ummm no one is comparing # of download between something that is free and not because currently you cant download a Sirius XM app.
Also, its actually 15.4 MILLION and DROPPING! I believe they LOST 400k subscribers last quarter.
IF you have followed Sirius XM, you would know that self paying subscribers grew from 14M to 15.4M. OBVIOUSLY you have not.
Hey Tyler. One problem with Pandora. It sucks. General concensus from my neck of the woods. I used it all the time. New novelty. Its programming is interesting. A few wrong clicks and my U2 station was playing some Bohemian Romanian garage band. Not cool. THen you have to try to get the station back on track…. of forget it. It sucks man. Sucks bad, sucks hard, and will suck tomorrow. No threat to SiriusXM. Like comparing listening to the wind blow through the trees(thats free too) and SiriusXM. Wind blowing is competition for SiriusXM too. Bad article. Its free for a reason.
Please explain their astronomical user growth and quick ride to profitability if they “Sucks bad, sucks hard, and will suck tomorrow?”
Relmor…..
I did not write the article.
That being said, services such as pandora have a pretty big following. No, they do nt offer all that Sirius XM does, but they are competing for, and getting an audience.
Tyler,
I have two points:
1) Give a take a few years, wouldn’t you say the demographic for listening to music (Pandora) are 13-35 year olds while people who listen to talk radio (Sirius XM) are 25-75 year olds. Pandora and Sirius XM are competing with different demographics.
2) Threats- Sirius XM is more of a threat to Pandora than the other way around because Sirus XM offers a variety of different music programs while Pandora has NO content at all. I always categorized satellite radio as all about CONTENT. The older people get, the more people want more informational content. Information is KEY in the future and satellite radio delivers that any where and at any time.
In conclusion, as an investor in Sirius XM the only thing I care about is self paying subscribers growing. In this environment, that will speak volumes about this company. How many times an app is downloaded when technology savvy people are younger in demographics have no meaning to me.
plays the same bands over and over, now they have commercials too.
doesnt matter how many new stations you create, you will notice the same bands, and same songs over and over again.
Yeah I like to say that Sirius could/should be what cable companies are to network tv.
Why buy cable when you can see the same shows just cut and with commercials for free. Well for one,they have commercials and two, cable offers specialty shows and programs. Heck my cable even has XM channels for music.
All of these free music companies will become just like broadcast tv. 50% program and 50% commercial. Of course then you have the advertisers that you cannot piss off.
One must ask why do people choose to put siri/xm in their new cars when they buy them? Because broadcast radio sucks. What makes the free pandoras of the world think they will be no different in the long run?
Oh and about the 50,000 subscriptions daily for Pandora. Well BK just had to end a promotion because when people hear the word free you will get 50,000 new “customers” daily also. Tell them with the purchase of a drink then that number will drop. Have to buy a fry too drops even more.
Don’t know if you have noticed, but Pandora has started running commercials. Wait…Isn’t that why we all left terrestrial radio? Any “FREE” business model will fail when the customer really has a choice.
I still don’t understand HOW Pandora makes any money. Yes, they are FREE and so many people will sign up(myself included)….but I read somewhere that 70% of it’s revenue goes to pay royalty fees! How much money can they be making anyway??? How can they stay in business??? It just doesn’t seem to make any sense to me. Can anyone explain?
I UNDERSTAND the appeal of Pandora. Even tho I have 5,000 plus songs on my ipod touch, I do find myself BORED with my list of songs even on shuffle. Having Pandora does give me a “quick” way of adding a sense of music discovery which is cool.
BUT…what alot of people fail to mention when bashing Sirius when comparing it to Pandora….is that Sirius has LIVE content. It has sports and talk and Howard Stern and on and on. In the car you can listen to it very easily. Not so with Pandora. Yes, Pandora gives you some cool control over what you WANT to listen to simply by typing in an artist or a song….and ALOT of people will download the free app…..BUT….it does have its limits. It doesn’t have all the cool live content or interviews or sports etc. So I HATE when these bashing articles FAIL to mention this. The fact that they DON’T only makes it obvious that the writers are short sellers and have an EXTREME bias to see this company fail. I’m not talking about Tyler….I’m referring to all these negative articles from the likes of Motley Fool, TheSTreet dot com, Wall street journal, Barrons, etc etc.
They ALL are SOOOOOO one sided it’s almost funny. I mean to NOT point out this HUGE advantage SiriusXM has is such BAD and obviously biased reporting that you HAVE to laugh.
Anyway, If SiriusXM can REALLY create a TRUE online app….one that will DIRECTLY mimic what the likes of Pandora and Slacker offer such as the ability to type in songs and artists to give the user the same kind of control….while ALSO offering it’s regular stations and original content….THEN SiriusXM will truly CRUSH Pandora and Slacker.
I really don’t know how Pandora and Slacker can stay viable anyway being a totally FREE service with very little revenue and MOST of that going to pay royalty fees. I don’t care HOW many people sign up. And if Pandora and Slacker start CHARGING a monthly fee? Even if it’s $5….just WATCH their numbers drop like a rock. All this talk about how many MILLIONS of people have downloaded their app will mean NOTHING once people realize they can just pay alittle more and get SO much more for their buck by subscribing to SiriusXM.
I mean when you REALLY think about it, it’s no contest. Yes Pandora is cool….but if SiriusXM does this iphone app right, they should DOMINATE not only terrestrial radio, but online radio as well.
They should strike a deal with Apple about linking to itunes so that people can buy songs with a simple click. They should offer online services that mimic Pandora and Slacker so that people can discover music in a similar way by typing an artist or song. If they do this PLUS provide the great stations and HUGE breath of talent, they will CRUSH the competition over time.
Yes… but I would be willing to bet more than half of Pandora users are also Sirius-Xm subscribers. Pandora makes a nice addition to Satellite, but in no way a substitute. I use both. About 90% Sirius-Xm and 10% Pandora, mainly because pandora is free. I wouldn’t pay anything for Pandora.(maybe a couple dollars). Sirius-Xm is worth the small subscription fee for what you get, and it’s not just a robotic jukebox.
Good article…BUT…you need to prominently mention that Pandora is a FREE service. That puts everything in perspective. Failure to mention that, assuming readers know it, is not accurate. S-XM is a totally different service in so many areas, especially related to LIVE content (sports and Howard, news, and talk radio), and commercial-free music. Add ease of use in a vehicle for anywhere, anytime entertainment, and Pandora and Slacker suck wind.
The whole premise behind the article and the word “free” were highlighted in the opening sentence. I bet you own SIRI.
Right…but….unless people who KNOW the details of how these things work, it is ambiguous as to what is meant by ‘free’…is it the application that’s free, the service, both, what? That’s my only point. That’s why i said ‘free service’, not just ‘free’. And, yes I own SIRI, so what? Did I say anything that isn’t true, or inflated? Nope. The market will ultimately decide.
Pandora is very cool. There are NO COMMERCIALS. Zero. Slacker does have commercials. One app. that I love on my iPod Touch is WunderRadio. You can receive all kinds of radio, streaming radio. You can even use the Touch’s GPS to receive local stations in your area. You can pick up police scanners and weather radio too. It is absolutely amazing. I have Sirius, but I like AOL’s Springsteen channel better than Sirius’.
But what gives Sirius the edge is their personalities. None of the other big internet radio services have DJ’s, or interviews, or any kind of human touch. I love to hear Carol Miller, Meg Griffen, Pete Fornatele etc. on the different Sirius channels. I don’t think Sirius promotes these folks enough. I never really know when and where to find them. Maybe I’m an old fogie, but I like to hear these Classic Jocks talk about concerts and do interviews occasionally.
No one has mentioned that a huge insider for the company sold roughly 50,000 shares at 36cents- on or about 5/15 although he owns roughly owns 1.5 million shares
Thoughts?? I think this item is a little more pressing then the issue cited above- since it was a real event
read the filing,it was specifically to pay state and federal TAXES on 1.5 mil shares vested in stock plan.
No big deal,happens all the time…
SXM is like the premium content of cable TV(HBO,SHO,TMC,Staarz)
Internet Radio of any kind is Basic cable TV,and trust me,Pandora,slacker napster I-pod I-tunes I-phone asll of them including Terr radio on line will become a sub based bussiness model over time,as will all content on-line…SXM is way ahead of the game IMHO,with ancillary income derived from I-Phone,that is all,not a panacea as predicted…
The OEM car install’s along with Bussiness’s and resorts is the Bread and butter for SXM,the rest is supplementing income which needs to be done…
When was the last time anyone listed to the free channels on their sat TV? probably never. Static music services offer little when compared to Sirius XM. Pandora and Slacker will struggle not from royalty fees, but from an increasingmy more demanding user base.
I’m a subscriber of XM in one car, Sirius in another, and Pandora at home. I like music, don’t love it, but I’ll gladly pay $30/month to never ever hear a radio commercial.
What many SIRI investors don’t realize is that Pandora music is far and above better than SiriusXM. Not even the slightest chance of comparison.
The fine-tuning that Pandora can do to your listening preferences is something that SiriXM can’t match. Within my typical favorite SiriXM radio stations, I’ll like maybe half the songs, and put up with the rest. With SiriusXM, I love 90% of the songs, skip 9%, and put up with 1% if I’m too lazy to click the button to skip it.
Once someone makes a cheap Pandora car tuner that tethers to Bluetooth data on your phone, SiriXM music is dead. I’m in the process of getting what I need to hook up my car to my Pandora AT&T cellphone, and I plan to drop my Siri subscriptions to news-only once that happens.
If someone such as I spends 90% of one’s SiriusXM time (in the car) listening to 40’s music (XM4), Sinatra et al. (XM73) and Broadway show tunes, will Pandora provide comparable content as easily accessible in the home?