SiriusXM is stabilizing as it mulls the future of digital audio

The news: SiriusXM added 149,000 subscribers in Q4 2024 and $1.6 billion in advertising revenues driven primarily by podcasting and programmatic ad sales, the company said this week.

The ad revenues were $17 million higher than Q4 2023, marking a notable success for an audio company that recently disclosed it would reduce music streaming efforts and seek to cut $200 million in costs to reprioritize its flagship in-car service.

Why this matters: SiriusXM is a unique company in radio and digital audio, offering distinct advertising opportunities through its in-car business. As a public company, the need for growth has forced it to expand into areas like music streaming, which it has struggled to penetrate.

• The company launched a substantial update to its app in 2023 with the hopes of breaking into the music streaming market, where rival Spotify has established itself as the dominant player. But Spotify’s robust advertising offerings and sticky personalization have made it difficult for competitors to chip away at its lead.
• Podcasting has become a bright spot for SiriusXM, but at steep costs. The company spent hundreds of millions to acquire popular celebrity-led shows like “Call Her Daddy” (formerly exclusive to Spotify) and “SmartLess,” which appears to have attracted advertiser and listener interest.
• With its podcast business stabilizing, SiriusXM is now looking to strengthen its core in-car offerings as it searches for a clear direction. Spotify has increasingly relied on AI-powered recommendations and resurfacing music that listeners have shown they will engage with, limiting its usefulness as a discovery tool. SiriusXM’s in-car business, on the other hand, takes the burden of curation and discovery off of consumers.

Our take: While Spotify might have the lion’s share of listeners and subscribers, marketers shouldn’t ignore the unique opportunities that alternative platforms like SiriusXM can offer. The company’s popular podcasts and in-car business allow advertisers to reach consumers in intimate settings, helping their ad dollars travel farther.