SiriusXM satellite radio provider is buying music streaming service Pandora for a $3.5 billion stock deal. The deal will create the world’s largest audio entertainment company. Why should SiriusXM buy Pandora? Because SiriusXM wants to gain people who listen to music but don’t want to pay for the premium SiriusXM service.
SiriusXM offers streaming without advertisements for $10.99 to $20.99 per month per car with up to 140+ channels, or streaming on any device for the same amount of $10.99 to $20.99 per month, or combine both options for all-access streaming. SiriusXM has 36 million subscribers in North America.
On the other hand, Pandora, which has 70 million active listeners (5.6 million who are paying members) can be used at no-cost as long as listeners don’t mind listening to advertisements. Or, listeners can buy monthly subscriptions at $4.99 or $9.99 per month for services that eliminate advertisements and offer personalized stations and create playlists, plus other options.
SiriusXM isn’t new to Pandora; it provided $480 million of funding to Pandora last year. Pandora faces stiff competition from other music services such as Apple Music, Amazon, Tidal, and Spotify.
The war to gain new listeners is heating up!
Group Activities and Discussion Questions:
- Poll students:How much music do they listen to each day? Where is their music coming from? How much do they pay each month?
- View SiriusXM: https://www.siriusxm.com/
- View Pandora: https://www.pandora.com/
- Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
- Which strategy is SiriusXM using? Why?
- Divide students into teams. Have each team research the different prices and packages offered by each music streaming company.
- Compare price structures. Which offers listeners the better deal?
Source: Wall Street Journal, New York Times, other sources