SiriusXM Holdings SIRI recently announced its exclusive Radio Broadcast Agreement with Rolling Loud, the largest Hip Hop festival brand in the world.
The broadcasts can be heard on SiriusXM’s Hip Hop Nation channel, which is being rebranded as Rolling Loud Radio and will include backstage interviews and live performances from various hip-hop artists.
SiriusXM subscribers will be able to listen to Rolling Loud Radio on SiriusXM Radios, the SiriusXM mobile app, smart TVs, Amazon AMZN Alexa, Google Assistant, Apple AAPL and Roku devices, among others.
Sirius XM Holdings Inc. Price and Consensus
Sirius XM Holdings Inc. price-consensus-chart | Sirius XM Holdings Inc. Quote
Partnerships Stoke Top-Line Growth
The latest partnership is in line with SiriusXM’s strategy of collaborating with artists and organizations in order to expand its content portfolio.
Notably, the company recently partnered with popular rock band U2 to launch U2X Radio, which includes a dedicated SiriusXM channel and exclusive interviews, live concert recordings and band curated playlists.
The company also partnered with Marvel entertainment to create exclusive content for SiriusXM subscribers. The deal includes new scripted series, unscripted podcasts and regular talk shows, including a celebrity show that will feature celebrity guests.
Further, SiriusXM scored a major win when it partnered with NBA to broadcast the 2019-20 season, offering live play-by-play of every game along with in-depth talk and analysis.
These endeavors have greatly strengthened SiriusXM’s offerings, which is expected to help it in acquiring more subscribers and boosting top-line growth.
Notably, in third-quarter 2019, SiriusXM generated $1.56 billion from subscriber revenues (77.4% of total revenues), up 16.1% from the year-ago quarter. Moreover, the company’s SiriusXM and Pandora segments added 210K and 33K net new subscribers, respectively.
The company expects this trend to continue in the near term as it increased its pro-forma revenue guidance for full-year 2019 to $7.85 billion, compared with its previous guidance of $7.7 billion.
Intensifying Competition to Hurt Growth
Higher royalty expenses along with increasing music licensing costs are likely to hurt SiriusXM’s overall profitability.
Further, the company is facing stiff competition in the music streaming market, which per Statista, is expected to generate revenues of $11.11 billion in 2019. The figure is expected to rise to $13.1 billion at a CAGR of 4.1% between 2019 and 2023. Further, user penetration for 2019 is pegged at 14.7%, which is likely to be 15.3% by 2023.
The music streaming market is currently dominated by Spotify SPOT and Apple.
Reportedly, Spotify has 248 million monthly active users, including both paid subscribers and those who avail the service for free. Further, the user base is expected between 255 million and 270 million in the current quarter.
Meanwhile, Apple has been gaining steam in the music streaming space with the expanding Apple Music subscriber base, currently consisting of more than 60 million paid subscribers.
SiriusXM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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