10/25/13: Sirius XM posts earnings and raises rates

Brad Hill
October 25, 2013 - 11:45am

From the department of mixed messages, Sirius XM reported record earnings on yesterday’s quarterly call, predicted disappointing earnings for 2014, and handed a rate increase to subscribers. SIRI stock is down over six percent on Friday, as of this post.

The third quarter was positive for the satellite broadcaster, showing year-over-year revenue growth of 11 percent, and subscriber growth of 9 percent over Q3 2012. Good wind for sailing forward? Well … the company shaved nearly $200-million off the average $4.17-billion revenue estimate Wall Street predicted for 2014, and handed a price increase of six dollars per year to its 26.5-million subscribers. The street isn’t over the moon about the lowered forecast, but favors Sirius XM’s confidence in hiking rates for only the second time since 2008.

Satellite radio faces the future with enviable advantages, and strengthening competitive headwind -- especially in the car. Most new cars have factory-installed satellite receivers, and offer months-long trial subscriptions designed to addict new listeners to the Sirius XM service. That distribution tactic plays out to a 45-percent conversion from trial to paid subscription. Historically, satellite’s increasingly entrenched position in the dashboard has disrupted AM/FM’s traditional reign in the car, forcing it to share built-in dash territory.

Going forward, Internet-connected dashboards offer an expanded suite of built-in listening choices. Even disconnected head units that permit smartphone plugs insert a competitive wedge between the driver and what comes through the car speakers. Pandora is the leading IP-delivered alternative to both AM/FM and satellite in the car, and many other options (including iPod playlists) cater to fine-tuned user customization better than one-to-many broadcast models.

Brad Hill
October 25, 2013 - 11:45am

Pure is a British consumer electronics company and ecosystem developer whose products include Internet-enabled radios, WiFi speakers, and a freemium listening platform called Pure Connect. The company’s business model ties together the Connect service with its in-home listening gadgets, much as Apple, Google, and Microsoft link music services with branded hardware devices.

Pure devices and the music service are sailing across the pond together -- the Jongo series of WiFi speakers is already available to U.S. consumers via Amazon and other outlets.

According to a rundown at Stuff.tv, Pure Connect holds a library of 15-million tracks and offers three levels of service, adding value on each tier with jukebox listening and downloading for offline listening.

The Jongo WiFi devices, naturally, are optimized to work with Pure Connect. This trick is similar to Spotify Connect, which is enabled via partnerships with speaker manufacturers. Spotify does not make its own speaker systems, whereas Pure’s many product components are all produced in-house.

Brad Hill
October 25, 2013 - 11:45am

Jacobs Media presented the second and final day of DASH, The Connected Car AudioTainment Conference yesterday in Detroit. (See Day 1 coverage here.)

Day 2 added a new dimension to the previous day’s industry discussions about the future of radio in the car, by introducing car dealers into the cross-sector mix. Three Detroit dealership owners were featured onstage before an attentive audience of radio pros eager to learn what type of listening consumers want in their cars. Some of the learnings were blunt: “If you are getting into the car via an antenna, and everyone is connecting digitally, you’re going to be left out.” And, on the revenue side: “You’d have to give me quantified data, for me to continue advertising with you.” One dealer wrapped up his contributions with this rueful comment: “When I got into car dealership, I didn’t know I’d have to understand the Internet as much as I need to.”

A session called “What’s New in the Car?” spotlighted execs from two car companies (Toyota, GM) and two aftermarket providers (Pioneer, Panasonic). Greg Ross, head of infotainment at GM, noted his company’s commitment to Internet connectivity: “16-million cars will be sold this year, and all will be connected.”

Larry Rosin of Edison Research showed video results of a consumer survey of new-car buyers, providing the day’s best LOL entertainment. The audience chuckled over segments featuring the difficulties of operating tech-heavy dashboards. There was no chuckling over brick-wall sentiments expressed by some subjects, especially when asked how their listening habits have been changed by expanded options. “I don’t listen to radio anymore because I don’t have to,” asserted one.

Erica Farber, president of the Radio Advertising Bureau, moderated a panel investigation of in-car ad strategies. Later, a cohort of radio DJs were questioned about their perspective on connected cars by Buzz Knight, VP of Greater Media.

Ed Cohen from Nielsen (who started the "Wild West” characterization of connected cars) hosted a consumer tracking panel, and Scott Burnell (Ford) joined Brian Lakamp (Clear Channel/iHeart) and Sarah Lumbard (NPR) in a discussion about partnering with automakers.

Brad Hill
October 25, 2013 - 11:45am

Emanating from the town of Larissa, Greece, Bar Legend Radio celebrates U.S. and British blues with an unrelenting blues-rock playlist. The site (www.barlegendradio.net) has in informational component, featuring biographies of bands and artists like The Allman Brothers, J.J. Cale, Rory Gallagher, Gov’t Mule, and others.

The curation of this stream is consistently satisfying. There is no interactivity, as usual with pureplay Internet stations, and there’s no need for skipping and favoriting if you like straight-ahead, guitar-oriented, beer-drinking, good-time-having, backbeat-driven 12-bar with an oldies slant.

The station is carried on TuneIn, Radio Tuna, RadioForest, and probably other aggregators. You can also listen directly on the site via a built-in player, or the major desktop clients. It all comes through at an adequate 128k mp3 bitrate.

Bar Legend Radio ushers the weekend perfectly.

Brad Hill
October 25, 2013 - 11:45am

Here are the top five, most-read articles this week, published at any time. 

Sirius XM apparently drops stations, infuriates users: RAIN noticed that Sirius XM’s Facebook page was exploding with comments from outrages users, over missing stations in the satellite broadcaster’s channel lineup. We never got a response to several requests for comment from Sirius XM. [READ]

Sirius XM will reportedly drop Clear Channel stations soon: Related to the above, from which many readers clicked over for background information. Sirius XM remains in the news, having announced slightly higher subscription prices for 2014. [READ]

Apple announces 20-million iTunes Radio users; fuzzy math abounds: The Apple-vs.-Pandora media tornado got moving when Cupertino announced latest audience metrics for iTunes Radio. Problems arise when you compare apples to oranges. (See what we did there?) [READ]

INTERVIEW: Jim Lucchese, CEO, The Echo Nest: Readers settled into Part 1 of our conversation with the head of a powerful unseen force in music services. [READ] (Part 2 is here.) 

Microsoft’s new Web Playlist dismantles traditional “station” listening: Readers are interested in a unique new feature in Xbox Music that unleashes the hidden musical quality of web pages. [READ]