Last week, satellite radio company SiriusXM announced they were increasing subscriber guidance to 700,000 self-pay subscriber net additions for the full year 2020. This is an increase of 200,000 self-pay subscriber net additions from guidance in the second quarter earnings report released to investors on July 30, 2020. Jim Meyer, SiriusXM CEO, commented on the reasons for the updated subscriber guidance in a news release.
“Our business continues to demonstrate strong performance and favorable trends since we resumed providing our subscriber and financial guidance in conjunction with our second quarter earnings report,” Meyer said in a September 9 news release.
“Our conversion and churn performance remain excellent, and it’s clear that demand for SiriusXM remains strong – quite simply, consumers continue to find immense value in our unique audio bundle and all of the entertainment and information it provides. Additionally, improving new auto sales, combined with a rising new car penetration rate, have led to a robust trial funnel that we believe bodes well for the coming quarters,” added Meyer.
Reaffirm 2020 guidance
The SiriusXM CEO also reaffirmed previous financial guidance for the year, which includes:
- Estimated total revenue of approximately $7.7 billion
- Estimated adjusted EBITDA of approximately $2.4 billion
- Estimated free cash flow nearing $1.6 billion.
“Today we also reiterate our full-year financial guidance for revenue, adjusted EBITDA, and free cash flow as we continue to see steady recovery in the advertising market coupled with the financial results of a very healthy core subscription business,” Meyer said.
Exclusive coverage and events
Part of the company’s success in attracting new subscribers may be the events they have been airing during the pandemic when fans are eager for familiar favorites. For example, on September 5, SiriusXM aired the Kentucky Derby live from Churchill Downs. This was one of three of the Triple Crown races that SiriusXM is airing in partnership with the Horse Racing Radio Network. On Sunday, August 23, SiriusXM aired coverage of the 104th running of the Indianapolis 500, including exclusive interviews and a virtual fan party with country music star Lee Brice.
Other popular exclusives include covering the first major event of the PGA Championship, live NBA action, Major League Baseball and live NFL games. In July, SiriusXM-owned Pandora announced a new concert series for virtual concerts with the first starring country artist Kane Brown on July 28. According to a news release, each concert will include the artists recording Pandora Stories with personal commentary along with songs they choose. Merchandise will also be available to support artists.
“People are still as passionate about live entertainment as ever, and they’re craving the moments of joy and connection that those experiences bring,” said Denise Karkos, CMO at SiriusXM and Pandora. “The music ecosystem has been massively disrupted this year, and artists need to find new ways to connect with fans, share their art, and continue creating. Our role is to give entertainers a platform to reach their fans in new and meaningful ways while filling the void for listeners who want to connect with each other and the artists they love. We’re placing advertisers at key consumer touchpoints before, during, and after the events to enable these special connections.”
In a time where none of us know what to expect, we find comfort in the familiar. SiriusXM and Pandora are capitalizing on that by providing listeners with what they want most – music, familiar artists, sports and popular live sporting events that we can’t currently attend in person. This has drawn new subscribers to SiriusXM and Pandora, which is why SiriusXM has increased its subscriber guidance. However, the company is conservatively keeping its financial guidance the same. This is also a smart move. While it makes sense that more subscribers might sign on, churn could potentially also increase.