Boston, MA 06/09/2014 (wallstreetpr) – Despite looming challenges ahead, Sirius XM Holdings Inc. (NASDAQ:SIRI) reported all-round positive numbers in the latest quarter.
Revenues in 1Q2014 were $998 million compared to $897 in 1Q2013 and $1.0 billion in 4Q2013. Subscriber revenues — accounting for 85% of 1Q2014 revenues — grew by 9% Year on Year to reach $851 million. Subscriber numbers grew by 6% to reach 25.8 million at the end of 1Q2014 compared to 24.4 million in 1Q2013. This makes Sirius larger than a competitor like Spotify but smaller than Pandora Media Inc (NYSE:P).
Talking of the competition, there are many, and they pose some serious challenges to the future of Sirius and its subscription-based service.
Competitors Galore
What are the ambitions of Apple Inc. (NASDAQ:AAPL) in the satellite radio or online streaming music space? Now that Apple has acquired Beats for $3 billion, Apple’s major ambitions in the music streaming space are out in the open. With millions of subscribers already of its iTunes Radio service and more than 500 million credit card details for its iTunes service, Apple has got a massive number of users it can tap for its growing radio offerings.
And make no mistake — grow it will. Apple has already started an ESPN station on its iTunes Radio — adding to the existing NPR channel already available on iTunes Radio. Expect more channels to be available on the iTunes platform in the future including CNBC, MSNBC, FOX News, Bloomberg and so on. If Apple gets the exclusive stuff like MLB, NBA, NFL and other sports events, things will get tough for Sirius (and Pandora) who tend to depend on exclusive content.
The other tech giant whose plans will have repercussions for Sirius XM Holdings Inc. (NASDAQ:SIRI) is Google Inc (NASDAQ:GOOGL). With its announced plans to launch a bunch of satellites into orbit (180 to be precise) to provide Internet access to one and all, providing satellite radio services from that fleet of satellites is going to be a minor challenge for Google.
And if Google joins the fray, can Microsoft Corporation (NASDAQ:MSFT) and Facebook Inc (NASDAQ:FB) be far behind?
With Spotify gaining subscribers and growing in popularity at a fast clip even before it’s listed, it could be a big threat to Sirius XM Holdings Inc. (NASDAQ:SIRI) as well. With 40 million self-reported active users of Spotify, it is, of course, smaller than Pandora which has 75.3 million active listeners. But with a 70% growth rate of both active users as well as paying subscribers, Spotify is the fastest growing in both the free and premium categories.
