JoltBlog

Thursday will see a shift in the audio landscape, as SiriusXM launches a major redesign and revamp of its app in a bid to grow beyond the radio dial and become a bigger player in the streaming audio space.

Or, in other words, to attempt to compete more seriously with Spotify. Touted as “the next generation of SiriusXM” at a launch event last month, the new app is clearly intended to prioritize the company’s streaming experience and draw in younger users.

The redesigned experience will allow listeners to leave off and pick up content between the mobile app and their cars, while a new pricing tier will offer a streaming-only plan for $9.99 per month (the same cost as Spotify Premium and a dollar cheaper than SiriusXM’s current all-access streaming plan).

The new app also more closely integrates SiriusXM’s audio holdings, which include music streamer Pandora and the podcasting platform Stitcher, in an interface that, well, looks an awful lot like the Spotify app.

The reasons for this revamp are obvious: SiriusXM has around 150 million listeners and has been stalled at about 34 million paid subscribers since 2020; Spotify has more than 574 million users and 226 million paid subscribers worldwide.

Pandora, meanwhile, had just 6.1 million paid subscribers as of Q3, having lost 150,000 year-over-year. It’s clear that a strategic shift is badly needed, and the company’s leadership evidently believes the new user experience will help restart growth.

“We are confident that the launch later this year of our new streaming products, brand platform and enhanced marketing capabilities will put us on a path for continued improvements in subscriber acquisition and retention as we move through next year,” SiriusXM CEO Jennifer Witz said on the company’s Q3 earnings call.

Unfortunately, this pivot is coming several years too late. Much like its fellow legacy media companies in the streaming video space, SiriusXM is now attempting to catch up in a race it wasn’t even running while Spotify gained a commanding lead.

While the company has made several moves to beef up its streaming holdings — it acquired Pandora in early 2019, and has been busily purchasing podcast assets over the past few years, including Conan O’Brien’s digital media business — it has failed to meaningfully leverage all those acquisitions. This app revamp is a long-overdue attempt to finally do so but seems unlikely to make up for the lost time.

Indeed, the redesign does not address SiriusXM’s biggest deficiency: There is still no function within the app to stream music on demand. While paid Pandora subscribers can do so in that service’s dedicated app, this feature is not being integrated into the new SiriusXM experience.

The company is positioning this as a strength to meet consumer demand for curated experiences, and a complementary experience to Spotify. “In 2023, there are millions of songs and shows available with the push of a button or a simple voice command,” CEO Witz noted at a launch event for the new app last month. “Navigating through the noise, whether self-curating or relying on algorithms, has gotten overwhelming.”

She added that the SiriusXM experience “allows us to better showcase the complementary aspect of our service, priming us for growth among those who currently subscribe to an on demand music service alone.”

During a demo of the new app at the event, Chief Product & Technology Officer Joe Inzerillo also emphasized the content discovery aspect of the user experience, noting, “Our host of programmers are like the friend who makes you the perfect mixtape, acting as professional discovery engines.”

Watching the demo, though, I couldn’t help but feel Inzerillo was finding an awful lot of ways to avoid saying you can’t just pick a song you want to listen to in the app.

It’s true that SiriusXM’s radio-station approach helps differentiate it from Spotify, and the content discovery aspect is a strength the company should certainly be highlighting. But, really, there’s no other way to slice it: The lack of an on-demand option is a major disadvantage.

Furthermore, while spoken-word audio has continued to grow more and more popular with consumers in recent years, it’s unlikely SiriusXM will profit much from this popularity. Even Spotify has struggled to translate platform-exclusive podcasts into major user growth, meaning SiriusXM would likely see limited (if any) upside from taking its owned podcast content inside a walled garden. (Howard Stern’s popular talk show has been exclusive to SiriusXM for years.)

The unfortunate truth is that with this pivot, SiriusXM is doing the best it can with the bad hand it currently holds, on-demand deficiency aside. As its usership ebbs and digital media listening becomes ever more popular in cars — the last bastion of radio — the company has no choice but to push further into streaming and is mostly making the right moves to do so.

But SiriusXM is running far behind in a race it simply can’t win, and there’s only so much that can be done to ameliorate that. For the foreseeable future at least, Spotify will continue to set the pace in the streaming audio space.

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