Observers speculate what the name of the new entity will be: SiriusAdora? Pandius? The news that SiriusXM was buying Pandora set a sour tone for investors. According to the Street.com’s Jonas Elmerraji, “The reaction was an ugly one for shareholders in Sirius XM – shares shed more than 10% to start the week, the worst single-day session for the stock since 2011.”
What does the proposed merger mean for advertisers?
Not much. The audiences to the ad-supported services of SiriusXM and Pandora are shockingly small.
SiriusXM listening is mostly an ad-free experience
Most of SiriusXM’s content does not have advertising. Most SiriusXM listening is to their commercial-free channels.
Only 26% of SiriusXM time spent listening is to their ad-supported spoken word channels. 74% of SiriusXM time spent is to the music-based ad-free channels. AM/FM radio is ad supported. 84% of the AM/FM radio audience hears ads when they listen to AM/FM radio at home, at work, or traveling in the car.
Ad-supported SiriusXM and Pandora: low reach, tiny audience share
Let’s compare audiences of ad-supported of SiriusXM and Pandora to AM/FM radio.
Here are the facts:
Edison’s “Share of Ear” study reports that AM/FM radio’s daily reach is 72%. Pandora’s ad-supported daily reach is only 11%. Ad-supported SiriusXM daily reach is only 4% and Spotify’s ad-supported content only reaches 4% of Americans daily.
Ads on SiriusXM hit only 4% of America, leaving a huge 96% of the country not reached by the medium.
Ads on Pandora have the opportunity of only reach 11% of America. 89% of Americans do not listen to Pandora in a typical day.
Looking at in-car audience shares, we see a similar story. In the car, ad-supported SiriusXM channels only have a 4% share of audio time spent. Get your electron microscope out for Pandora’s tiny audience share of 1% in the car.
AM/FM radio in-car share? A 67% share! Sixteen times greater than SiriusXM’s 4% share. AM/FM in-car audiences are 67X greater than Pandora. 67% of American audio time spent in the car is with AM/FM radio.
Pandora’s audience erodes for the 9th consecutive quarter
SiriusXM is buying Pandora’s melting ice cube of audience. Stemming back to Q2 2016, Pandora been experiencing relentless erosion in share of time spent among Americans 18+.
Since Q2 2016, Pandora’s share has dropped -29%. Analysts indicate Pandora’s audience losses come at the hands of Spotify and the increasing consumer desire for on-demand functionality.
Pandora’s audience collapse will continue. RBC Capital Markets analyst Mark Mahaney states, “Pandora may lose market share if users increasingly switch to on-demand products such as Spotify and Apple Music.”
AM/FM radio continues to be a trusted and effective medium
Analysts feel Pandora’s best days are behind it. Barton Crockett, FBR Capital Markets Analyst, concludes: “Pandora pioneered something really interesting, really special with their free ad-based streaming music service … [but now] the early adopters are moving to on-demand, and mainstream America is still in love with AM/FM radio.”
- SiriusXM listening is mostly an ad-free experience
- Ad-supported SiriusXM and Pandora: low reach, tiny audience share
- Pandora’s audience erodes for the 9th consecutive quarter
- AM/FM radio continues to be America’s dominant, trusted, and effective audio medium
Pierre Bouvard is Chief Insights Officer at CUMULUS MEDIA | Westwood One.
Contact the Insights team at CorpMarketing@westwoodone.com.