If you can’t beat ’em, join ’em.
SiriusXM, which has offered a subscription, ad-free alternative to terrestrial radio since the turn of the century, has launched a free, ad-supported service that’s only available in cars as it looks to gain ground on AM/FM alternatives.
The company quietly launched the service in the past quarter and addressed it in its most recent earnings call.
“This quarter, we introduced SiriusXM free access, our first-ever free ad-supported version of SiriusXM now available in select vehicles,” said CEO Jennifer C. Witz. “Free access allows us to engage potential customers…with an offering of a limited number of music and talk channels with ads.”
The service is not available on a wide scale yet, but Witz said the company expects free access “to grow in future years, providing us an opportunity to increase trials, win back listeners, and explore the potential for a broader ad-supported tier of SiriusXM.”
The entertainment company saw the number of its satellite subscribers drop by 173,000 in the second quarter—100,000 of whom were paid subscribers. (The remainder were promotional and trial subscribers.) The drop in paid subscribers was better than the 130,000 it lost in the second quarter of 2023.
Total revenue came in at $2.18 billion, down 3%.
SiriusXM has a dedicated base of users, but AM/FM still controls a 60% share of ad-supported and ad-free offerings in cars, according to Edison Research’s Q1 2024 Share of Ear survey. (And it controls 86% of the ad-supported market.)
The company has also faced increased competition in recent years from streaming services like Spotify and Apple Music. That has made it more challenging for SiriusXM to convert trial users to paid subscriptions.
