Music streamer Pandora Media, Inc. (NYSE:P) has established a working partnership with Sirius XM Holdings Inc. (NASDAQ:SIRI). Sources have it that the acquisition of the satellite radio company is valued at $3.5 billion. It will bring together 36 million subscribers from SiriusXM’s with close to 70 million active from Pandora.The duo’s combination will create the world’s largest audio entertainment Company.
The partnership comes at a time when digital audio advertising is becoming a popular medium in reaching out to consumers. In fact, according to IAB, it has grown from 40 percent in 2017 to $1.6B. However, SiriusXM is set to benefit from Pandora Ad Capabilities, digital presence, and mobile strength. In return, Pandora will tap SiriusXM’s industry expertise and financial strength.
Listeners rush to streaming apps in a burgeoning and crowded market
Tens of millions of listeners are speaking for streaming apps, which are easy to navigate. The demand for such apps is increasing by the day and the two are hopeful of being able to bridge the gap. According to Sirius XM’s chief executive, the merger will help in reaching out to more listeners. It would also lead to the promotion of different services to their already two existing but growing large audiences.
Jim Meyer explained, “Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms.”
The streaming business is already very competitive
Meyer was speaking to investors while outlining that their interest was in clinching a market share within the already competitive space. However, he did not mention the competitors but it is on record that Spotify is the industry leader in the streaming business. The music streaming giant supports over 180 million users. Reportedly it has higher paid subscription rates compared to Pandora.
However, Meyer seemed unshaken by the competition citing that their goal is to increase value through subscriptions. In any case, industry estimates indicate that Pandora has an incredible presence in the U.S.
Apparently, this is not the only merger that Pandora has acquired. Earlier in the year, the company acquired AdsWizz. According to the chief executive Roger Lynch, growing the company’s advertising business is the key strategy, which they will use to build on its audience.