Nearly two decades after Howard Stern bolted for satellite radio, the now 70-year-old radio host’s future is up in air. His contract with SiriusXM is set to expire next year, and Stern has made noise about retiring. Whether then or in the future, President and Chief Content Officer Scott Greenstein says SiriusXM is better prepared to withstand the impact than ever before as it has added several big-named talents to its radio and podcast lineups.
“We love our bench,” Greenstein said. “Whether it’s James Corden, Conan, Andy Cohen and many others. They’re not Howard replacements, they have their own distinct audience style, and demo that they go after. And so we feel pretty good where we stand on that front as we continue to evolve our content.”
That being said, during a conference with analysts Tuesday, Greenstein said the company would still prefer that Stern decides to stick with broadcasting and with SiriusXM, saying his audience is growing younger.
“You never want to be a company without Howard. And if he decides to retire or do whatever he does, you know, that’s his choice, [but] we would like him to be here,” Greenstein said. “But as far as replacing — you don’t replace someone, you come up with a strategy based on what is your current demo and target audience, looking at what would be best suited for that at any given time.”
Spending More On Podcasts Than Satellite Radio
Once all about satellite radio, SiriusXM says the release of a new streaming app last fall was just the first step in a longer, multiphase journey to build out a new digital-focused infrastructure.
“While it’s extremely early given our three-month trial structures, there are some promising engagement indicators among new users,” Witz said of the app, which rolled out in November. She told analysts during an earnings call that later this year the company plans to add sharing and content sampling features, as well as other podcast enhancements. “Throughout the year, we expect to continue to innovate on our podcast product features, including content preview functionality coming later this year, rolling out first with podcasts,” Witz said. “This will become more important as we begin to offer podcasts when doing an exclusive library of assets for Sirius XM subscribers, that podcast listeners won’t find on another platform.”
Greenstein said SiriusXM’s push into podcasting has allowed the company to reach new listeners, pointing out that its five biggest shows have more than 70 million downloads each month in the U.S.
SiriusXM may have 33 million satellite radio subscribers — a figure that declined by 359,000 during Q1 as its churn rate climbed higher — but that is not where most of its programming investment is now focused.
“Our biggest incremental content investments are now in podcasting, and in service of both growing our advertising base audience reach and then delivering more value to Sirius XM subscribers,” Witz said. “We believe we can effectively monetize and deliver broad reach to benefit podcast creators, while also carving out unique content experiences to drive interest and engagement to Sirius XM subscriptions and a true win-win.”
Satellite Subscribers Dip In Q1
SiriusXM’s total revenue was $1.7 billion in Q1, a 1% decline compared to the prior year period as subscription revenue sagged. But its digital advertising revenue on Pandora and the new streaming app increased 8% year-to-year to $362 million. And its podcast ad revenue increased 16% versus a year earlier.
Witz said she believes the growth in streaming ad sales, particularly programmatic sales, has been in part to advertisers placing ad buys later than in the past. “It certainly contributed to podcast being up in the first quarter,” she said.
Pandora has seen year after year of user declines, and that continued to be the case during Q1. Pandora monthly active users declined 4% year-to-year to 45 million, down 1.6 million from a year ago. And Pandora subscribers decreased to 5.9 million, which was also down 4% from last year. Yet Pandora had revenue of $495 million, a 7% increase versus last year. That allowed the division to post a $143 million profit.
Looking ahead, SiriusXM says it expects satellite radio subscriptions to pick up during the second half of the year. It is not forecasting any additional numbers, but it does expect to have about $8.75 billion in total revenue this year.