Sirius XM loses over a quarter-million subscribers in Q1 of 2024

[CTListener]

Seems to me the XM half of the company made some sort of promise to keep the music free. Not that it means anything.

That promise was made before the "merger" (which actually amounted to a Sirius takeover) took place. With no competition in satellite radio, SXM can do whatever it wants, especially if its bean counters and Wall Street sharpies say it will benefit the bottom line.

As for fitting ads into the programming, when XM was obligated to carry commercial stations from Clear Channel/iHeart, a narrow selection of songs selected strictly for their length was played during each stopset. On the country station, you'd hear Brooks and Dunn's "Red Dirt Road" every couple of hours solely because it fit the break exactly. That sort of thing could conceivably be done again.

 

[Theater of My Mind]

You mean like Amazon Prime Video? Seems to have worked well for them.

Most people with a Prime membership got it for the free shipping. Putting ads on the bonus video service wouldn't have the same effect on their decision as it would on a solely entertainment-driven purchase like SXM.

So, you think that SXM trying something different after losing a batch of subscribers is considered greed? Lord I hope you aren't trying to run a business.

Let's cut the drama. They are down about 1 percent from churn. They'll lose a lot more than that if they force ads onto the paid subscribers.

 

[DavidEduardo]

Yup. This is another issue I have with them. I remember when my dad would get "free samples" in his truck. We'd be hearing the same songs again day two or three. Just awful. There were like 4 million hits in the 60s. I don't really care to hear "Sweet Caroline" every other day, thank you very little. He doesn't care about the sound quality aspect - it's the repetition that was a large part of why he didn't subscribe.

What you describe, however, is not their problem.

Traditional radio stations long ago discovered that more songs does not mean better programming. When you actually test music by playing bits of the songs for many listeners, you find that each genre or "format" has a core of playable hits that everyone loves or at least likes a little.

When you go beyond that, you find songs that some people like and others dislike or hate. In other words, songs that some of your listeners will dislike... often enough to seek their music experience elsewhere.

Your dad's additional favorite songs were, in research, many other listener's disliked ones. So if Sirius/XM had played your dad's playlist, it is likely that a majority of the other listeners would have hated it.

Any "one-to-many" type of broadcaster has to program to the consensus, not the individual. If they add songs with low research scores, it becomes "one too many".

 

[Kelly A]

Most people with a Prime membership got it for the free shipping. Putting ads on the bonus video service wouldn't have the same effect on their decision as it would on a solely entertainment-driven purchase like SXM.

So all those videos available for Prime members aren't of any interest to members? Hmm.. I wonder why Amazon spends so much to produce video content then?

Let's cut the drama. They are down about 1 percent from churn. They'll lose a lot more than that if they force ads onto the paid subscribers.

SXM already runs ads on non-music channels. I'd be willing to bet that if SXM were to have enough national ads in the cue and they offered discounted subscriptions for ads on music channels too, whatever 'churn' as you put it, would be negated. The problem is; national ad buyers aren't interested in advertising on platforms like radio or TV.

 

[DavidEduardo]

As for fitting ads into the programming, when XM was obligated to carry commercial stations from Clear Channel/iHeart, a narrow selection of songs selected strictly for their length was played during each stopset. On the country station, you'd hear Brooks and Dunn's "Red Dirt Road" every couple of hours solely because it fit the break exactly. That sort of thing could conceivably be done again.

"At the beginning" XM had deals with several terrestrial broadcasters.

Another was with HBC, Hispanic Broadcasting. HBC was given 5 channels for Spanish Language formats, and was allowed to sell half of the commercial inventory (which I believe was 6 minutes an hour). The sale of those three hourly / 72 daily spots at what was hoped to be "national rates" would have made the deal very profitable for both.

I was the "department head" of the XM endeavor. We had 5 PDs, one for each format in Latin Rock, Pop/AC, Regional Mexican, Salsa/Merengue and Tejano. And each format had voice trackers for all dayparts.

The HBC satellite formats were run on the computerized systems in DC. There was no "fit the break length" as any potential stopset that was not full or only partly full just returned to music.

As to Clear Channel, the satellite channels were able to "read" the local station logs and match the length with commercials, PSAs, promos and the like. That is what they did with, IIRC, a couple of Salem channels. If the Clear Channel channels did not do it that way, it was a mistake which the existing technology at the time was totally able to overcome.

 

[DavidEduardo]

So all those videos available for Prime members aren't of any interest to members? Hmm.. I wonder why Amazon spends so much to produce video content then?

Good question. In my household, we find Netflix and Amazon Prime to provide about 80% of our non-local-news viewing. The others, like Peacock, Paramount+ and the like are only barely acceptable within our family budget.

Last year, we had over 1000 orders from Amazon, so Prime is primarily justified with the free shipping. But if I had to pick just one of the Amazon/Netflix choices, it would be a hard decision. And, since Amazon's service comes with the free deliveries, Netfilx would lose.

And a current example: We got over 20 hours of live "Stagecoach" broadcasts last weekend on Prime. As opposed to eating dust for three days and spending $2400 for two tickets-with-seats, that alone made Amazon the winner.

SXM already runs ads on non-music channels. I'd be willing to bet that if SXM were to have enough national ads in the cue and they offered discounted subscriptions for ads on music channels too, whatever 'churn' as you put it, would be negated. The problem is; national ad buyers aren't interested in advertising on platforms like radio or TV.

And even if they sold ads on the music channels, the total listening to any one channel at any given moment is so fragmented between over 100 total base channels that no single channel would be a good targeted buy for advertisers.

 

[DavidEduardo]

I don't deal with streaming. At home I have a music server set up that has over couple million songs, and my classic vehicle still has a working 8-track!

And you are what, in research language, we call an "outlier". When we find such people in research projects, we remove their responses from the project summary. It is impossible to program to outliers because, such as your 8-Track example, you are few and each of you is uniquely different.

 

[bigdonho]

We have three cars in the family with subscriptions. The price kept increasing and every renewal time discussed whether it was worth it. That last time we renewed SXM offered $5/month. Otherwise we would have let the subscriptions expire.

Regarding audio quality, some of the voice channels like CNN, CNBC, Fox News are compressed so much to save bandwidth that they are almost painful to listen to.

Remember that SXM offers a number of non-audio services such as traffic, air craft weather radar, marine weather, etc. Might they be reducing bandwidth to allow more for these other services?

 

[DavidEduardo]

"In a given month."
I'm sorry, but that's not particularly impressive. It also doesn't mean they are spending much time listening when they are reached once a month, either.

A period of time was used to give the study a base. If you go to weekly results, and combine diary and PPM markets, you find that about 85% of all people 18 and over use radio every week.

Interestingly, in the mid to late 1990's before the Internet was huge, the figure was 94%. There was always a 5% to 6% figure in every market of people who did not use radio at all (and over half were due to "opportunity" issues such as being sick or hospitalized, being at a long work project where no radio was allowed or even "my car radio was broken".)

If the average person went to restaurant 1 once a month... that's great, but when the full picture is that they're eating the rest of their meals at the other restaurant...

Once a month is the extreme. The average person listens many days a week in all adult demographics.

Yes, they listen fewer hours than before, but they do listen. Heck, I remember in the later 90's we saw some youth Time Spent Listening erosion and it was traced to video gaming. There are lots of things people can do with their time.

Not to mention... much of that listening happens in the car.

Half does, half does not. Proven in the diary markets where you show "Home" "In Car" "At work" and "Other" location for each entry.

Why? Because that's the entertainment form that many cars still have. That second restaurant option is only now making its way into more and more cars. Most drivers have been beholden to option one for a very, very long time unless they wanted to purchase and program their own music on 8-track, cassette, or CD. But that limitation no longer exists... Radio (and XM) no longer has the easy dash monopoly.

And the average car on the road is over 11 years old now, meaning half of them are over a decade old. And not everyone subscribes to alternative services for their newer car, either.

Your wife doesn't have to become a "program director." I can open Apple Music on my phone and just hit play on the playlist it already puts together for me based on other things I listen to on the app. Personalized just for me! She could do the same with any of the major streaming providers. As far as "fumbling with her phone," most cars with phone connectivity are as easy to switch playlists with as they are to switch radio stations - many easier to switch playlists than to switch to a radio station that is not already saved as a preset.

Yet there are a lot of people who don't make playlists because they prefer to select known channels or stations based on the genre of music that fits their mood. And there are many more who like personal playlists some of the time and curated lists at other moments. A lot of us just don't have the time to fuss over playlists constantly and incessantly, just as we don't have the time to watch tidbits on TikTok or follow dozens of people on X or whatever.

I'm 22. It is exceedingly rare that I get into a car driven by someone my age and hear radio - satellite or terrestrial. It's almost exclusively some form of CarPlay. Heck, when I mention to my friends that I'm on the radio Friday afternoons, the most common response is I'd listen, but I don't know how to turn on my car's radio.

Yet there are, statisticlly, a majority of 18-24s who use radio some of the time. And as an advertising medium, we don't have to reach everybody. Nobody does.

I think this is the issue Sirius is going to have long-term. The difference between them and terrestrial radio is that when people tune in once a month to Sirius, they cancel their subscription. It doesn't cost a listener anything to tune into terrestrial radio once a month.

You are obsessing with the "once a month" issue. More than half the 18+ population uses radio every day or two. Over 85% use it every week. Nationally, those are huge numbers.

 

[MarkW]

They likely can't cut the subscription cost across the board to be more competitive because of the cost of those damn satellites. Hosting a bunch of streaming encoders located on terra firma is cheap as compared with the purchase, launch, insurance, licensing and maintenance costs of several devices floating in orbit.

Great point.

Ten years ago, I assumed the birds in the sky would be decommissioned by, say, 2030 at the latest. I figured cellular technology would be used to deliver all content to in-vehicle listeners by that point.

Suffice it to say, the likelihood of my prediction coming to fruition (within that timeline) now appears very low.

 

[Kelly A]

Ten years ago, I assumed the birds in the sky would be decommissioned by, say, 2030 at the latest. I figured cellular technology would be used to deliver all content to in-vehicle listeners by that point.

Suffice it to say, the likelihood of my prediction coming to fruition (within that timeline) now appears very low.

Up until a few months ago, I was in technical management at a major TV broadcast group/network. The company already had fiber to all the major cities, so satellite was mainly being used for network distribution but no longer remotes on any regular basis. We also kept one uplink going that provided IFB for U.S. reports, but for the most part, the company was steering away from expensive satellite usage.
It seems like LEO 'cubesats' are all the rage now, mainly because they're cheap to build and launch. Problem is; they're limited in function and don't have the propellant to remain in orbit as long as expensive conventional birds.

 

[Negin]

And you are what, in research language, we call an "outlier". When we find such people in research projects, we remove their responses from the project summary. It is impossible to program to outliers because, such as your 8-Track example, you are few and each of you is uniquely different.

My cousin who works in radio said that. The truck is from the mid 70s from my uncle and it still works like a charm. The 8-track unit does have a MW/FM radio though. I used to take the thing to car shows eons ago. When I lived in the SF Bay Area back then I would show it off at the Good Guys Nationals at the Pleasanton Fairgrounds.

The tapes for the tape deck are considered classic rock!

 

[boombox4]

Acquiring Pandora when it was obvious that Spotify had all the momentum was almost as incomprehensible as it would have been for some company to acquire Myspace when Facebook was growing exponentially. Another example of "too late to the party."

I don't see it as that much of a mistake. The future of music consumption is online, and there will always be a need for more than one platform, and Pandora is still popular according to research on Online Listening. In fact, Pandora's audience online outstrips IHeart by almost 3:1 among listeners under age 35 (2021 figures, the latest I could find).

Pandora also has more listeners in the older demos as well. At least as late as 2021, Pandora had around 25% of the overall US streaming audience, depending on demos, compared to Spotify's 27%, YouTube's 44% and IHeart's 12%.

What Are the Most Popular Music Streaming Services?

Curious to know what the most popular music streaming services are in 2021? The answer might surprise you, because Spotify isn't number one.

www.digitalmusicnews.com

The streaming picture is still developing. It won't be until OTA radio is out of the picture that we'll see who the biggest players are, and who the failures are. YouTube is king right now, among all demos. I don't see that changing.

EDIT: the 2023 Nielsen Report that BigA linked has similar numbers, although in Nielsen they're including Radio in the data, where the report I linked just looks at online audio.

 

[boombox4]

Nielsen Releases Audio Today 2023 Report - RadioInsight

Nielsen has released its annual Audio Today report examining how Americans use broadcast radio, podcasts, streaming and satellite radio. Nielsen notes that the report "also details the growth in digital streaming listening as a portion of the overall radio audience, plus listening location, time...

radioinsight.com

https://docs.google.com/viewerng/viewer?url=https://radioinsight.com/wp-content/images/2023/06/Nielsen-2023-Audio-Today-How-America-Listens-Jun23.pdf&hl=en

Very interesting report. Thank you for posting that link.

RE: the popular formats, on page 17. The Median ages appear pretty high... Is that a potential issue for Radio? AC, median age, 50. Country, median age 49. News talk, median age 58. Classic Hits, median age 54. Pop/CHR is median age 38, but a lot of the other formats seem to have high median age numbers. Is this a potential issue, or am I interpreting the data wrong?

 

[TheBigA]

Is this a potential issue, or am I interpreting the data wrong?

Those are general format demos, not specific station demos. So you can have stations reach listeners who are below the average age. We see that happening a lot in country because of the high amount of currents some country stations play. In some markets, the country station is #1 18-34. The median age for that station is likely younger than the average.

 

[DavidEduardo]

Very interesting report. Thank you for posting that link.

RE: the popular formats, on page 17. The Median ages appear pretty high... Is that a potential issue for Radio? AC, median age, 50. Country, median age 49. News talk, median age 58. Classic Hits, median age 54. Pop/CHR is median age 38, but a lot of the other formats seem to have high median age numbers. Is this a potential issue, or am I interpreting the data wrong?

Median means there are an equal number of listeners on either side. So a station with a median age of 50 has half of its listeners under 50.

CHR is targeting women 25-49 so nearly all are in that range.

 

[secondchoice]

Acquiring Pandora when it was obvious that Spotify had all the momentum was almost as incomprehensible as it would have been for some company to acquire Myspace when Facebook was growing exponentially. Another example of "too late to the party."

Pandora's long term (10 or 20 years) survival was questionable. Business aside, the app works better than Audacy (IMHO). I don't know if it is scalable to replace the "narrow band" satellite service that people pay for. One reason my Father paid for it was if you live or travel a lot in rural areas (10 miles from a 4 lane highway) weak terrestrial OTA signals can be all there is.

 

[Kelly A]

Regarding audio quality, some of the voice channels like CNN, CNBC, Fox News are compressed so much to save bandwidth that they are almost painful to listen to.

For voice grade, one could argue it's no better or worse than terrestrial AM. Just different forms of degraded.

Remember that SXM offers a number of non-audio services such as traffic, air craft weather radar, marine weather, etc. Might they be reducing bandwidth to allow more for these other services?

The satellite transponder segment bandwidth is allocated using statistical multiplexing. Certain music channels have bit-priority over other voice grade channels. In other words; the bit rates for voice grades are reduced if prioritized music channels need more to maintain a certain range.

 

[Greg Goodfellow]

I don't see it as that much of a mistake. The future of music consumption is online, and there will always be a need for more than one platform, and Pandora is still popular according to research on Online Listening. In fact, Pandora's audience online outstrips IHeart by almost 3:1 among listeners under age 35 (2021 figures, the latest I could find).

Pandora also has more listeners in the older demos as well. At least as late as 2021, Pandora had around 25% of the overall US streaming audience, depending on demos, compared to Spotify's 27%, YouTube's 44% and IHeart's 12%.

What Are the Most Popular Music Streaming Services?

Curious to know what the most popular music streaming services are in 2021? The answer might surprise you, because Spotify isn't number one.

www.digitalmusicnews.com

The streaming picture is still developing. It won't be until OTA radio is out of the picture that we'll see who the biggest players are, and who the failures are. YouTube is king right now, among all demos. I don't see that changing.

EDIT: the 2023 Nielsen Report that BigA linked has similar numbers, although in Nielsen they're including Radio in the data, where the report I linked just looks at online audio.

My wife was a big consumer of K-Love, but she tired of the incessant, superheated begging and has gone almost entirely to her Pandora channels.

 

[gr8oldies]

Most people with a Prime membership got it for the free shipping. Putting ads on the bonus video service wouldn't have the same effect on their decision as it would on a solely entertainment-driven purchase like SXM.



Let's cut the drama. They are down about 1 percent from churn. They'll lose a lot more than that if they force ads onto the paid subscribers.

Seems commercial-free music has always been a brand promise.