Sirius' 3 divisions are expected to make $8.1 billion for full-year 2020
(1) Subscription $ 6.2 billion (77%),
(2) Advertising $1.5 billion (18%), and
(3) Equipment & Others $365 million (5%)
Sirius XM's Business Model
What Need Does It Serve?
Sirius XM business features music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the U.S. on a subscription fee basis - distributed through satellite radio systems and streamed via applications.
Pandora business operates a music, comedy and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, car speakers or connected devices. Pandora is available as an ad-supported radio service, a radio
subscription service, called Pandora Plus, and an on-demand subscription service, called Pandora Premium.
Has 3 Operating Segments-
1. Subscriber: Sirius XMs subscriber revenue includes fees charged for self-pay and paid promotional subscriptions, U.S Music Royalty Fees, and other ancillary fees. On the other hand, Pandora Subscriber revenue includes fees charged for Pandora Plus and Pandora Premium subscriptions.
2. Advertising: This includes the sale of advertising on Sirius XM's non-music channels and from Pandora's audio, video and display advertising.
3. Equipment & Others: Sirius XM's Equipment revenue includes revenue and royalties from sale of satellite radios, components and accessories. Other revenues include service and advisory revenue from Sirius XM Canada, connected vehicle services, and ancillary services.
What Are The Alternatives?
Streaming On-Demand Services: Amazon Prime, Apple Music, Google Play Music, Spotify and YouTube
Advanced In-Dash Infotainment Services:
Apple CarPlay and Android Auto
Online Advertising Platforms: Amazon, Facebook and Google
What Is The Basis of Competition?
Competition is based on services provided to attract subscribers, listeners and advertisers.
Overall, Subscription revenue increased from $4.2 billion in 2016 to $6.1 billion in 2019, driven by higher U.S. Music Royalty Fees due to a higher music royalty rate, higher self-pay subscriptions revenue as a result of increase in the daily weighted average number of subscribers and higher revenue from connected vehicle services.We expect revenue to grow slightly to about $6.2 billion in 2020, driven by slight growth in the subscriber base, increases in the average price charged, and the sale of additional services to subscribers.
Subscriber sales contributed 79% of total revenue in 2019. This share is expected to go down to 77% in 2020.
Segment revenue increased from $138 million in 2016 to $1.3 billion in 2019, driven by an increase in rates charged per spot as well as a greater number of advertising spots sold and transmitted.
We expect revenue to grow by about 12% to about $1.5 billion in 2020, led by more advertisers being attracted to its national platform and growing subscriber base, as the company is set to launch additional non-music channels.
Advertising sales contributed 17% of total revenue in 2019. This share is expected to go slightly up in 2020.
DISAGREE WITH OUR FORECASTS? CREATE YOUR OWN
1. How to save your forecasts:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can see how well you forecast the company's performance at the end of each period and compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.