Pandora may be changing strategy now that SiriusXM invested, but both could be on the way out if they can’t find a way to compete with other streaming services.
Why pay for a semi-ad free radio when most cars come with Bluetooth for free now?
Two (potential) has-beens becoming one
This June, SiriusXM announced a $480M investment in Pandora Media. Jim Meyer, SiriusXM’s chief executive said in a statement, “This strategic investment in Pandora represents a unique opportunity for Sirius XM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where Sirius XM does not play today.”
He notes, “Pandora’s large user base and its ability to provide listeners with a personalized music experience are tremendous assets.”
This March, Pandora launched Pandora Premium, an ad-free subscription meant to compete with Spotify and Apple Music. With Premium, users finally have the option to customize playlists and play songs on-demand.
To stick out in the streaming market, SiriusXM needs to differentiate itself from its competitors. As people seek to avoid duplicating charges, the most universal option will win.
Right now, major players Spotify and Pandora offer free tier services in addition to limited- and ad-free subscriptions, while SiriusXM and Apple Music are paid-only access. Here’s the current standings:
Apple Music— 27M subscribers, 100 countries
Pandora— 4.39M subscribers, 100M U.S. (free) listeners, 3 countries
SiriusXM— 31.6M subscribers, 128 countries
Spotify— 50M subscribers, 140M (free) listeners, 60 countries
Basically, Spotify is killing it in terms of paid subscribers. Full disclosure: I am in a happy, healthy relationship with Spotify, while Pandora remains a bitter ex, and I never even gave Apple Music the time of day. SiriusXM and I have been on a few dates, but I don’t have a subscription.
I know Spotify is problematic in terms of artists receiving fair royalties…it’s something horrible like tenths of tenths of a cent, but I still am a loyal subscriber. As someone who’s frugal to the point of convincing myself I really do need to spend money on groceries, what compels me to spend money on Spotify over everything else?
In regards to Apple
Well, for one, Apple made iTunes nearly inaccessible on my phone by burying my songs with Apple Music. I felt like I was being forced into their platform.
As for Pandora
When I first tried Pandora, it endlessly frustrated me with limited skips and its inability to fully customize a station.
It seems a little late in the game to start offering these services, but at least they finally got there.
Unfortunately, my initial experiences with old-school Pandora are enough to make me wary of their new offerings.
Not super Sirius
As for SiriusXM, it just seemed like too much of a hassle to get setup in my new car when I was still trying to adjust to the culture shock of no longer having a cassette tape player. Sirius is an awesome setup for radio lovers though.
So how can SiriusXM and its newfound pal Pandora stick out from the crowd? They’re definitely moving in the right direction by focusing on user-friendly customization and control over playlists.
However, both are still primarily radio-based services while Spotify and Apple Music offer radio as part of their services, not the whole.
Spotify offers easy transitions from mobile to desktop, and give me a weekly playlist to find new music. It makes it easy to be lazy. I’m too grown up to pirate music anymore, yet not motivated enough invest in buying and synching music from my computer to phone.
If SiriusXM and Pandora’s partnership can offer something easy to set up with an abundance of pre-created playlists in addition to customizable ones, I might be interested in giving them a try.
Gotta fight for your right to stream
Perhaps something that taps into conscious consumerism, like focusing on increasing artist royalties compared to their competitors. Or maybe a gimmicky “portions of our proceeds” donation to music-focused charities to make subscribers feel like they’re making a socially-conscious choice.
To stay alive in this market, SiriusXM needs to bring something beyond what Apple Music, Spotify, and other competitors are already offering.