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Pandora Was The Right Purchase for SiriusXM

Pandora radio has been around since 2000 and is considered by most to be the big brother of the streaming media business. While Pandora was revolutionary for the time as services like iTunes, Spotify, iHeartradio, TuneIn and Rhapsody went live Pandora stayed there course. While Pandora is still a great service they are not a popular full-fledged music service and have less then a six million paid subscribers but Pandora has one advantage they have tens of millions of free listeners. While Pandora has never given out an exact number the estimate is somewhere around 75 million people listen to free Pandora a month.

Pandora has figured out the formula on how to make money by targeting the right music with the right ads at the right people. While Pandora at times has struggled to make money they understand the streaming radio business better than anyone.

SiriusXM came out around the same time Pandora did and while they did great becoming a new format of radio they struggled to get a foothold on the app market. SiriusXM satellite technology for delivering radio was revolutionary for its time when no one had smartphones or data plans. At this time Pandora was still just a website and had several years to wait before smartphones are released. This a time when Yahoo and MSN still had web-based music services.

When the iPhone released SiriusXM did not have a smartphone app however Pandora became one of the top downloaded music Apps on the iPhone App Store. Remember this is a time where the only subscription music services are Microsoft Groove and Rapsity. Apple iTunes is still paying as you go per song and Spotify is only in Europe.

While SiriusXM had tremendous growth using the in the car radio model from the car manufacturers. Pandora had much growth in the smartphone, smart speaker and smart TV market. While all this smartphone stuff was going on SiriusXM app struggled until they made an investment in Pandora. Pandora helped SiriusXM make a great app and helped them grow into Phone and smart speaker market almost a ½ decade late and way behind everyone else at this point.

While Pandora has a very noticeable brand and great tech they struggled to get revenue and have always struggled to make a profit.

Both companies are in the radio business not the full music subscription service like Spotify, Apple, and others. While Pandora has a full music service it has never really gotten off the ground like others and has no chance of catching up to Spotify or Apple.

It just made sense for SiriusXM to buy Pandora as both companies can benefit from each other Pandora with there great modern tech and Pandora from SiriusXM massive music and content library. I think this was a good call by both companies as they can benefit from each other and are both in the same business.

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