Sirius XM

Weekend Perspective: Week Oct. 21-25

Friday, October 25, 2013 - 5:10pm

RAIN’s Weekend Perspective summarizes the week’s important events for a weekend catch-up, and revives your blasted synapses for coming week.

 

PARTNERSHIPS

Clear Channel and Black River: The radio group added to its growing portfolio of partnerships with record labels. Details not disclosed, but this one likely follows the template of Clear Channels agreement with Warner Music Group: higher broadcast royalties, lower streaming royalties, artist promotions on radio. [READ]

MUSIC SERVICES & APPS 

iTunes Radio reaches 20M listeners: And media outlets indulge in fuzzy math by comparing iTunes Radio and Pandora audience metrics, which use different standards. [READ

YouTube music service: YouTube is the gorilla in the room when it comes to music services. Not formally set up for music, the platform is nonetheless rampantly used for music search and playback, especially by young listeners. RAIN analyzes whether YouTube would compete with itself by formalizing a music service. [READ]

Sirius XM disappoints subscribers: Unexpectedly and without explanation, Sirius XM dropped several popular Clear Channel stations. The satellite company’s Facebook page swarmed with malcontent. [READ]

...and raises their rates: In its quarterly call to Wall Street investors, Sirius XM (SIRI) showed off steep gains in revenue and subscriptions from a year ago, but also lowered guidance for 2014 and raised rates on subscribers. [READ]

Twitter #Music nearing the end: Not official, but reports have us believe that Twitter’s music no-quite-service, underdeveloped but sometimes fun, and only six months old, will be shelved. [READ]

Microsoft plays the Web: Xbox Music was updated, and one new feature struck us as unique and potentially disruptive: a way of building a playlist from any web site that mentions artists and bands. [READ]

Rhapsody courts CD buyers: The music service gives one-month free subs to CD buyers at Best Buy. It’s an interesting play for consumers who might not be converted from ownership to access. [READ]

Songza updates: The Songza app is prettified for iOS 7. [READ]

“This American Life” goes endless: The public radio program, hosted by Ira Glass, has an 18-year archive of shows. A new TuneIn stream plays them continuously, with zero interactivity, for total saturation. [READ]

British music service sailing for U.S.: That would be Pure Connect, which works seamlessly with Pure WiFi devices. [READ]

ILLUMINATION 

Jim Lucchese: The CEO of The Echo Nest, a music intelligence company, describes how it powers many of the features used by millions of people across hundreds of music services. [READ Part 1] [READ Part 2]

DASH conference: A two-day conference in Detroit scrutinized every aspect of the connected-car movement, from the viewpoint of radio, solution providers, automakers, aftermarket companies, car dealers, and disc jockeys. RAIN was there. [DASH Day 1] [DASH Day 2]

OUTBURSTS 

Dave Allen vs. David Byrne: It’s a blog-debate. Settle in -- each of these gentlemen is voluble on the subject of Spotify. [READ]

 

RAIN Hotspots: Week of Oct. 21-25

Friday, 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]

Sirius XM reports record earnings, lowers guidance, raises rates

Friday, 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.

Sirius XM offers cheap re-subs and continues to climb

Monday, October 14, 2013 - 11:25am

It's a rising tide. While Pandora, iTunes Radio, and other IP-delivered music services build momentum, Sirius XM continues to disrupt AM/FM’s automotive presence, with enviable subscriber numbers. As Tom Taylor notes in his NOW newsletter this morning, “Sirius XM recently passed the 25-million subscriber mark, and its stock hasn’t traded this high since early 2006.”

Distribution is the key driver. Satellite radio was developed specifically for the car, where Sirius XM now enjoys a widespread installed base -- nearly seven out of 10 new cars have Sirius XM on board, according to Seeking Alpha. The company also furnishes an online component, in a reversal of the distribution order of Internet pureplays like Pandora, which started online and pushed its way into cars secondarily. (Sirius XM also offers stand-alone receivers.) Many new-car buyers discover SiriusXM’s diverse and star-studded programming with free introductory trials that last for months. An impressive 45 percent of those buyers convert to paying subscribers. (Pureplays take note: it can take MONTHS to habituate new users to a listening service … not days.)

To capture subs that have fallen off the grid, Taylor notes that Sirius XM is offering a six-month re-subscription for $25, total. Normal subscriptions cost between fourteen and eighteen bucks a month. 

That’s smart business, but the smartest part of satellite’s success has been hitching its fate to the car. Internet pureplays are not oblivious, and they are all scrambling for position in the connected dashboard. When they get there, they find competition from two staunch legacy forces: broadcast and satellite.

Satellite radio operator complaint accuses record industry groups of anti-competitive behavior

Wednesday, March 28, 2012 - 12:45pm

U.S. satellite radio provider Sirius XM has filed a lawsuit against SoundExchange and the American Association of Independent Music (A2IM), accusing the record industry organziations of interfering with its efforts to directly license the sound recordings. The complaint accuses SoundExchange and A2IM of being in violation of federal antitrust law, and New York state law.

The satellite radio firm, like webcasters, pays the owners of recording copyrights (that is, record labels) royalties to play music. Sirius XM reportedly pays SoundExchange 8% of its gross revenues for all the music it uses on its over-the-air programming, which SoundExchange distributes to the labels.

But this agreement ends this year, and the record industry will likely be pushing for significantly higher rates beginning in 2013. Moreover, Sirius XM says it wants a single license covering all its platforms (satellite, Internet, and mobile). So, "instead of relying exclusively on licenses either negotiated with SoundExchange acting as the record industry's collective or on the outcome of regulatory rate-making proceedings," Sirius XM felt it could get more competitive royalty rates by licensing music directly from the labels themselves, cutting SoundExchange out of the equation. In 2010, it began what it calls its Direct Licensing Initiative, offering labels rates of 5%-7% of "defined" revenues (see more RAIN here and here). Though they met with some success (Sirius XM says it has managed to secure almost 80 direct licenses with copyright owners), the company insists it would have been able to get many more if not for the alleged interference.

Sirius XM now contends that SoundExchange and A2IM, "along with major music industry organizations, have organized a boycott to prevent independent record companies from negotiating direct licenses with SiriusXM," alleging an "orchestrated effort" to prevent potential licensing partners from negotiating directly with Sirius XM.  

Sirius XM published a press release on the suit, which you can read here. There's coverage from The Wall Street Journal here, and Reuters here, Radio-Info here, and more here.

Industry legal expert David Oxenford examines the implications of this news for webcast licensing, in today's B story.

Study shows usage of Pandora in cars up 75% over last year

Friday, October 7, 2011 - 11:00am

Pandora in-car usage is up 75% over 2010In Q3 2011, 11 million people listened to Pandora in their cars, according to data from MagnaGlobal's Media Access Quarterly. That's up from 6.3 million in 2010 (around 75% growth).

By comparison, MagnaGlobal reports Sirius XM had 19 million in-car subscribers in Q3 (up from 18 million; around 6% growth).

Two factors may have contributed to Pandora's growth, says MagnaGlobal: (1) more than 90% of cars now have auxiliary input jacks, perfect for hooking up smartphones, and (2) there are now over 100 million smartphones in the U.S.

Inside Radio has more coverage in today's newsletter, which you can subscribe to here.

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