Why Sirius XM made Pandora a favorite station
Sirius XM made Pandora a favorite station by purchasing them for 3.5 billion. In recent years, digital audio has been booming. With platforms such as Pandora and Spotify, you can create playlists based on your mood, your personal preferences, or where you are. Ad revenue continues to grow making SiriusXM wanting to join in the movement.
The combination of Sirius and Pandora will allow Sirius to expand beyond an audience that mostly listens while driving. With the help of Pandora, they will reach 100 million users in their vehicles, homes and on mobile devices.
The addition of Pandora will allow SiriusXM to provide significant ad inventory to marketers that are turning towards digital audio advertising. AdsWizz let marketers run sequential messaging across multiple formats. Allowing advertisers to target listeners through display, then with a related video ad, and then with a digital audio ad.
Sirius XM has 23 million trial customers each year, but only 36 million are paying subscribers. When combined with Pandora’s 70 million users, the company feels it will still succeed even when listeners don’t subscribe. Jim Meyer, chief executive at SiriusXM, said, “ My ultimate thinking in all of this is no matter who comes into our trial funnels, as they exit that trial that somehow, they are in a funnel in which we are monetizing.”
Another reason for acquiring Pandora is the increased revenue from podcasts. The US podcast ad revenue totaled $314 million in 2017, an 86 percent increase from the previous year. Revenue is expected to grow to $660 million by 2020 according to the Advertising Bureau.
Sirius XM’s acquisition of Pandora will provide a variety of revenue streams that will create the world’s largest digital audio ad offering.