Sirius, long commercial-free in cars, is betting on advertising to capture new listeners

Core Viewpoint - SiriusXM is shifting its business strategy towards an ad-supported subscription model to drive revenue and retain customers in a competitive audio entertainment market [3][12]. Group 1: New Subscription Plan - The company launched its first ad-supported subscription plan, SiriusXM Play, priced at under $7 per month, offering a limited selection of commercials across music, sports, news, and talk shows [2][4]. - This new plan aims to convert free trial users into long-term subscribers, particularly targeting drivers who do not renew after their trial period [6][7]. Group 2: Market Position and Strategy - SiriusXM is focusing on its core in-car radio business, which constitutes 90% of its customer base, while also planning to expand the ad-supported option to nearly 100 million vehicles by the end of 2025 [4][13]. - The company is reallocating resources from high-cost streaming audiences to enhance its in-car offerings and advertising strategy [12][13]. Group 3: Financial Performance - In the most recent quarter, SiriusXM reported $2.07 billion in revenue, a 4% decline year-over-year, with net income falling to $204 million from $241 million [15]. - The company generated approximately $1.8 billion in total ad revenue for 2024, with $394 million reported in the latest quarter, reflecting a decline from the previous year [16]. Group 4: Competitive Landscape - SiriusXM faces increasing competition from streaming services like Spotify and Apple Music, which are gaining traction in the in-car audio space [11]. - The company is drawing parallels to Netflix's previous struggles with subscriber growth and its eventual shift to an ad-supported model [9][10].