SiriusXM in ‘Major Push’ to Drive Out-of-Car ‘Engagement’ Via Streaming, Says CEO
Initial subscriber response to the Android and iOS streaming apps that SiriusXM introduced in May, including launch of the company’s first Howard Stern video offering (see 1804250005), “has been excellent, with engagement climbing and strong ratings in the app stores,” said CEO Jim Meyer on a Wednesday earnings call. The apps are part of a “major push” to use streaming “to drive engagement with SiriusXM outside of the car,” said Meyer.
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SiriusXM thinks its out-of-car streaming capability to mobile devices “enhances our value proposition and will make subscriber relationships richer and stickier,” said Meyer. The company is seeing “substantial growth” in streaming through Amazon Alexa and other connected devices, he said. “You will see us focus more on winning over potential subscribers who do not have a need or desire for an in-car plan,” he said of the streaming market opportunity. Though subscribers without an in-car plan currently make up a “very small portion of our business,” Meyer is optimistic “that with the right marketing approach and distribution arrangements, our content assets will be very appealing to a large number of potential out-of-car subscribers.”
Despite the company’s avowed focus on building out-of-car streaming subscriptions, Meyer is “not ready" to answer questions about future streaming pricing strategies or the potential size of the targeted subscriber base, he said. “This is one I feel really good about.” The competition “outside the vehicle for audio will always be strong,” he said. “We will not be left out” of the competition “because of technology,” he said. “The money we're investing in our apps and the money we're investing in our connectivity initiatives are going to allow us to do whatever we want to do. This battle going forward is going to be all about, how compelling is your content? How easy to use is it?”
With the “very clear” focus on targeting “people who only want to subscribe to our service to stream on their phone or stream on a device in their home or something else independent of the car, we understand the channel conflicts that can create,” said Meyer. “In the next six to 12 months, we'll test our way into that to figure out a way where we hope one plus one can be more than two.”
Meyer is pleasantly surprised with early subscriber reaction to the Stern video offering, which already attracted “millions of plays” in its short period of existence, he said. "When Howard puts his mind behind something, it's always good, especially when you marry that with our team.” Meyer was struck by the number of subscribers he heard from who said they like the video offering and want “to see more,” he said. “I've challenged Scott's team significantly here to broaden this, and I think you'll hear more from us as we get into 2019,” he said of President-Chief Content Officer Scott Greenstein.
SiriusXM’s strategy all along has been to make its video offering “complementary” to its audio service, said Greenstein. “There's plenty of content that would be appealing, whether in real-time or short form,” to offer on the streaming-video service, he said. The offering “eventually” will feature a “live component,” and “other things that I think could be really fun,” he said.