SiriusXM backs off streaming and looks to cut $200 million in costs

The news: SiriusXM is backing away from its recently launched music streaming platform and plans to cut costs by $200 million, the company announced Tuesday as it gave a 2025 revenue outlook that fell below investor expectations.

The streaming play: SiriusXM consolidated its satellite, radio, and streaming offerings into a single app in 2023 in an attempt to penetrate the music streaming market. But with services like Apple Music and especially Spotify leading the space with a large (and growing) subscriber count, SiriusXM has had trouble staking a claim.

• The company spent big earlier this year on exclusive podcasts, signing “SmartLess” and “Call Her Daddy” away from Amazon and Spotify, respectively, in a bid to bolster its offerings with popular shows and chip away at competitors’ leads. But with those podcasts still available on competitors’ platforms, there’s little reason to join SiriusXM for them.
• Instead of following in rivals’ footsteps, SiriusXM now plans to lean into what it says is its most unique advantage: car listenership. Ninety percent of SiriusXM subscribers have the service embedded in their cars, the company said in a press release.
• However, the company said that despite streaming’s “high-cost, high-churn” environment, it will continue to push subscribers toward its features.

Distinguishing factors: Spotify’s moat has made it difficult for SiriusXM to compete, forcing it to pursue different avenues to drive revenues. Its car listenership, radio model, and DJ personalities give it a distinct edge, but Spotify could also threaten those strengths.

• Over time, Spotify has leaned less on discovery features and more on resurfacing music that users have already shown interest in. SiriusXM’s radio-style, hands-off approach to music takes the load of deciding what to listen to off of users.
• Spotify also has features that meet demand for ease of use. Its AI generated Daylists and personalized mixes give users easy options for click-and-go listening—though they too tend to resurface familiar music, diminishing the platform’s use for discovery.

Our take: SiriusXM is leaning into advantages that distinguish it from the glut of music streaming offerings, which could allow it to explore unique opportunities for subscriptions and advertising.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.