Sirius XM Holdings Inc. is a satellite radio service that offers commercial-free streaming on over 175 channels in the United States and Canada. These channels are comprised of every type of radio – music, news, sports, talk, and more [2]. It is currently the largest radio broadcaster and caters to about 26.7 million subscribers [3].
Currently, the most popular way for subscribers to enjoy SiriusXM Radio is in the comfort of their cars. SiriusXM has arrangements with over forty automakers for installation of their services directly into the vehicle [3]. However, as of recent, SiriusXM has become available to stream directly online in your home or office, as well as an app that can be accessed on Smartphones and Tablets.
SiriusXM currently offers three different packages: Sirius Select, Sirius All Access, and Sirius Mostly Music. The packages can be bought on a monthly or annual basis and range in price from $9.99 to $199 [4].
SiriusXM recently released their 2014 Third Quarter Results, which revealed a 10% increase in revenue since this time last year, putting the company at a record high of $1.1 billion. This is higher than analysts originally anticipated for the company, as they put the company’s assumed revenue at $1.04 billion. The company also increased its subscriber count by 1.2 million [8].
Interest in shares of SiriusXM increased rapidly during the month of November. As of November 14th, there has been an increase of 2.8% since October 31st up to 247, 283,696. The company is now up to a $3.75 price on their stock [32].
SiriusXM’s current competitors are Apple and iHeartMedia, as well as regular terrestrial radio. Pandora and Spotify have also been named as competitors, but in a recent interview with James Meyer, CEO of SiriusXM, the two services were ruled out.
Meyer explained these companies are streaming services, which he doesn’t view as competition, but as its own distinct technology. Meyer also stated that out of them all, terrestrial radio is their primary competition, with 220 million people that use it everyday [9].
However, with Apple’s new CarPlay, that might not be the case for much longer. CarPlay gives drivers access to all of their music, podcasts, and audiobooks with the touch of a button, and major auto companies like Mercedes-Benz, Volvo, and Ferrari are already on board. The venture is still in its early stages, but since SiriusXM is primarily used by vehicle subscribers, CarPlay could end up being a serious competitor [10].
What sets SiriusXM apart from its competitors at Apple, and iHeartMedia is the company’s original content that can only be accessed through subscriptions to SiriusXM.
[15] The Howard Stern Show, one of the most popular talk shows on SiriusXM
Some of the most popular original content shows include The Howard Stern Show, The Oprah Winfrey Show, and NFL Radio, although many more are available [3]. This original content helps keep subscribers tuning in, and keeps SiriusXM’s churn rate at an impressive 1.9%. It also helps the company keep their acquisition costs low, which has recently become problematic for companies like Pandora [14].
SiriusXM is also known for their “Town Hall” Series. These intimate gatherings take place in the SiriusXM fishbowl, a private listening studio, where entertainers sit down with a live studio audience comprised of about 30 SiriusXM subscribers who have won an invitation to the event [16].
[19] Taylor Swift at a Town Hall Event for SiriusXM
Recently, SiriusXM was able to snag Taylor Swift for a Town Hall Event. Subscribers had the chance to ask her questions and listen to songs off of her newest album, 1989. This event comes after Swift’s recent decision to pull her music off of Spotify, giving even more leverage to SiriusXM [18].
The Today Show for SiriusXM:
This past year, SiriusXM announced a major deal with NBC, in which simulcasts of the hit NBC show, The Today Show, would be broadcasted on the satellite radio service. The format of bringing a morning show to radio has been done before, unsuccessfully. However, what makes this different is that SiriusXM will not be airing segments of the popular morning show, they will be airing the program identically as it airs on television [20].
This move was a strategic boost for both companies. The show airs during popular morning drive time, when radio listening is at its highest. The deal will allow NBC to access SiriusXM’s 26 million listeners, and SiriusXM hopes to draw in more subscribers that are already fans of the show.
SiriusXM has come under fire in the past year over use of music recorded before 1972. More recently, individual bands have started going after the company, claiming that they deserve compensation. Although songs recorded before February 15th, 1972 are not covered by federal copyright law, some artists and labels have been seeking protection under individual state laws – and the courts have been agreeing. As of November 17th, the 1960s rock band, The Turtles, has had two victories against the satellite radio company [22].
The court ruled that music recorded before 1972 still has a public performance right and that digital services cannot use it without permission or compensation. SiriusXM has requested to dismiss the lawsuit, but it has been rejected. The judge ruled that SiriusXM has until December 5th to show any factual issues that would be cause for a trial. If none are found, she will rule in favor of the band, and “assess damages” [23].
SiriusXM recently announced that Golf Hall of Fame member Sir Nick Faldo will receive his own show, where he will talk golf and get to know golf enthusiasts, while they get a chance to know him [26]. SiriusXM also launched a new pop channel, Venus, as well as adding some of their popular internet only channels like Y2Kountry and Utopia to their satellite lineup. Joel Osteen Radio will also be coming to SiriusXM, a station rooted in the power of “positive thinking with messages of inspiration” [27].
SiriusXM is currently celebrating the sounds of the holiday season with the addition of two new Holiday Music channels, Holly and Holiday Traditions. They plan to release more within the upcoming month [33].
Also effective January 2015, there will be an increase of 1.4 percentage points in the U.S. Music Royalty Fee applied to most SiriusXM audio packages, in order to fund royalty payments to the music industry [29].
[2] The most updated visuals of the Spotify application on thee platforms. Users have an on-demand stream of music on their computer, mobile device, tablet, and home entertainment system.
Spotify is a music streaming service that puts users in control of 20 million licensed songs [3]. Spotify was launched in Sweden in 2008 and came to America in 2011.
Spotify is financially a private company that offers over 20,000 new songs each day from major and independent labels including EMI, Warner Music Group, Universal, & The Orchard[3]. Artists earn royalty when their music is played, and there are over 24 million active users currently in 55 markets [3].
There are two revenue streams, free, which is “powered by advertisers” and premium for $9.99 monthly with extra features including no ads, offline, and high-quality audio [3].
TEAM SPOTIFY:
[4] Spotify Founders- Daniel Ek & Martin Lorentzon
[5] Chief Sales, Marketing, and International Growth Officer- Jeff Levick
[6] Chief Content Officer & Managing Director USA- Ken Parks
Social Media Merges with Music- Using the “send to”, or “post to feed” options users can message music to friends and post music to their Facebook timeline, Twitter, and Tumblr within the Spotify application. Source: Spotify
Spotify gives its users the option to connect with their social media Facebook, Twitter, and Tumblr accounts. Users can create collaborative playlists, share music, view friends music and more which provides for ample music discovery and publicity for the company on social media platforms. There is also a private session users can activate.
Two other elements that Spotify includes are apps and Discover. While these apps add dimension to the Spotify journey, Discover is essentially a constantly updated news feed.
Discover- Spotify’s “news feed” feature on the desktop application. Updates with releases, playlists, artists recommendations, concerts nearby are posted, friends listening habits are shown all based on listening habits the user has shown. Source: Spotify
COMPETITORS:
Spotify is a strong contender, but it’s competing neck and neck with Rdio, Pandora, Rhapsody, Google Play Music, and Beats on price, catalogue, platforms, and features [8]. Beats Music entered the competitive on-demand music market in January [9], and is Spotify’s biggest challenger.
[10] Beats Music vs. Spotify- The two streaming services are extremely similar with the same catalogue size, the discovery element, and price.
Beats entry in the market put Spotify in “go-mode”.
SPOTIFY’S SITUATION:
Competitor streaming services are continually emerging. With more choices presented to consumers, Spotify has responded by shifting their focus to partnerships, acquisitions, customer satisfaction, and updated product development. The formula is to attract users to Spotify, engage with users, and retain them.
Partnerships
Last.fm
Last.fm is a music recommendation service. In January, Spotify and Last.fm teamed up to bring a beneficial on-demand playbar to Last.fm’s website. This makes it possible for Last.fm users to internally play the entire Spotify catalogue on Last.fm’s website [11].
The collaboration works in both companies favor. Last.fm users have a fuller experience with the power, “to play whatever you want by whoever you want directly on Last.fm” [12]. In addition, Spotify’s catalogue incorporation provides a huge presence and Last.fm users conveniently have motivation to signup for Spotify to take advantage of the essential music player.
The Last.Fm Spotify playbar at the bottom of Last.Fm’s website. Source: Lastfm.com
SoundHound
Spotify also joined forces with SoundHound for the “Add to spotify” feature on its iOS application in February. SoundHound is a popular music-recognition app, similar to Shazam. Banded together, SoundHound is now more interactive. After linking accounts, with the tap of a button users can automatically generate Spotify playlists of recognized songs without leaving SoundHound’s app [13].
Hitting the “Add to Spotify” button automatically turns songs discovered on SoundHound into a Spotify playlist. Source: SoundHound & Spotify
The mutually-beneficial relationship brings life to identified songs through Spotify playlists on SoundHoud, and the incentive to use the button will drive users to subscribe to Spotify while giving them presence on a music app [14].
Coachella
On top of that, Spotify was presented with an amazing opportunity to have presence on site at Coachella as the Official Digital Music Partner of the Coachella Music and Arts Festival in California in April. The Spotify Social tent was an on-site air-conditioned tent that offered relaxation pods, chargers, a “Mosaic Photo Booth” that uses your Spotify account to generate a picture out of your most played album art, and art from artist Apex[15].
[16] The Spotify Social tent, that capped at 150, gave people an air conditioning experience filled with music, more battery power, art, and a Mosaic Photobooth that puts your face on album covers based on your Spotify listening habits.
#WeWereThere was Spotify’s digital interactive strategy at Coachella to “connect, collect, share.” Implanted in every RFID wristband was the power to capture the experience by checking in andcollecting custom Spotify curated playlists. The “My Coachella Story” digital snapshot let individuals create memories of their festival concert experiences with playlists gathered [16]. This collaboration not only transformed Coachella goers into premium users, but also created a special experience and built relationships by reliving the festival on Spotify.
[15] “My Coachella Story”- an example of a digital snapshot that shoes distance traveled, the path taken, playlists, artists seen etc. To participate users needed to simply connect their wrist band with their Spotify accounts, look for check ins at the festival, use the wristband to collect playlists and then after generate their digital card and share it with family and friends.
Sprint
Lastly, Beats launched with an AT&T package family plan deal. Rumors are circulating about Spotify planning to bundle with the #3 U.S. mobile carrier, Sprint[17] in April. This partnership will give Sprint customers a free trial. Customers will be able to pay for Spotify directly through their Sprint Accounts, which will help Spotify secure a greater market share and Sprint secure more data plans. Sprint and Spotify will announce the details on April 29th at a New York Event [18].
Acquisitions
In efforts to boost the “discovery” element, Spotify acquired The Echo Nest in March [19]. The Echo Nest is a music intelligence company that examines listening behavior and makes musical recommendations. Spotify paid $100 Million, with 90% Spotify equity [20]. The Echo Nest previously powered Rdio and Rhapsody, both of which ended their deals, deeming its technology invaluable to their operations right after Spotify acquired [21]. This potentially puts Spotify in the position to take The Echo Nest away from competitors.
Combing the two companies gives The Echo Nest a bigger audience and catalog, while Spotify, now with music-discovery data, will improve recommendation’s.
Customer Satisfaction
With intentions to obtain more paying users Spotify has updated its business model. In January the company announced free music shuffling on iOS with a catch, non-premium users ads play in between every few tracks [22]. In February, Spotify added the “repeat one” feature [23]. Repeat one grants users the option to repeat a single track over and over [24]. These highly requested changes illustrate that Spotify cares about users.
Working with a college students budget, Spotify slashed the premium $9.99 monthly rate to $4.99 in March [25]. They partnered with SheerID to validate eligibility. This price change is valuable because college students represent an important key demographic in streaming use [26]. This differentiates Spotify from other streaming services like Rdio and Beats that charge $10 monthly.
Unique Product Development
Competition among streaming services leads Spotify to completely redesign its user interface layout on all platforms. Spotify rolled out a sleek modernized look on April 2nd. This major design update was the first since its launch in 2008, and to keep current it was a smart move [27].
The new dramatic, dark color scheme highlights important buttons, includes circular images for people, and features square album shapes [29]. The browse tab is revised and categorized between top lists, releases, news, and moods. “Your Music”, a collection of users saved albums, songs, and artists is a new addition [30]. The Your Music addition mimics iTunes library and it is comparable to Rdio’s “collection” feature. It helps users save, organize, and browse through their favorite music. The new layout feels unified and balanced, and should attract new users [31].
WHATS NEXT FOR SPOTIFY:
Spotify is headed in the right direction, but with downloads declining, new rival services like YouTube, Apple, and Amazon that have huge user bases are joining the streaming market [32].
Being active puts Spotify in the forefront, which looks great for Investors. It is rumored that an IPO is in Spotify’s near future. Though the company has declined all comments, a job advertisement for an “External Reporting Specialist” has been posted on their website and LinkedIn[33]. Their future looks competitive but successful.
![[33] Holiday music channels at SiriusXM](https://bejone03.expressions.syr.edu/trf235/files/2014/10/Screen-Shot-2014-12-01-at-2.59.43-PM.png)
![[1]](https://bejone03.expressions.syr.edu/trf235/files/2014/03/spotify-logo-primary-horizontal-dark-background-rgb.jpg){kind=logo}
![[6] The most updated visuals of the Spotify application on thee platforms](https://bejone03.expressions.syr.edu/trf235/files/2014/03/overview.jpg)
![[2] Spotify Founders- Daniel Ek & Martin Lorentzon](https://bejone03.expressions.syr.edu/trf235/files/2014/03/daniel_ek_and_martin_lorentzon-5.jpg)
![[5] Chief Content Officer & Managing Director USA- Ken Parks](https://bejone03.expressions.syr.edu/trf235/files/2014/03/kenparks.jpg)
![[7] Head of Content- Steve Savoca](https://bejone03.expressions.syr.edu/trf235/files/2014/03/Screen-Shot-2014-04-16-at-8.56.10-PM.png)
