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Coronavirus Impact on Satellite Radio is Uncertain
RADIO ONLINE | Wednesday, May 13, 2020 |
During an investor's conference, SiriusXM Senior Executive VP and CFO David Frear said, "Unemployment is stress. And that's got to have a knock-on effect for people spending money." Even as listening of satellite radio options like Pandora and SiriusXM have seen a jump for stay-at-home consumers, Frear warned Tuesday that his industry faces an uncertain future.
During a Media and Communications Conference session that was webcast, he told J.P. Morgan Global Technology, "I haven't talked to anybody who has a good picture of what the recovery will look like." However, even with the pandemic and widespread sheltering in their homes, satellite radio powerhouse and Pandora owner SiriusXM has yet to take a big hit to its bottom line judging by its recently released first-quarter earnings.
"People are not commuting as much, but as they come into the home, they've carried over a lot of those (listening) habits into the home," Frear told the investors conference. As American workers, including at SiriusXM, increasingly work remotely, the satellite radio broadcaster has promoted online streaming and introduced promotions to build out and sustain its online listening businesses. But Frear cautioned that a big question mark looms over how many commuting Americans eventually will leave their homes to return to their workplaces as the U.S. economy reopens, especially if there's a second wave of the coronavirus in the fall.
A pending economic recession may also impact subscriber and advertising trends. Frear predicted the hit to SiriusXM subscriber levels will be felt later this year, amid the absence of strong new-car sales. SiriusXM recently unveiled better-than-expected first-quarter results as Americans listen more to music streaming services overall amid the pandemic than before it hit the U.S. economy in March.
On the upside, SiriusXM active users are up 30 percent in early May, compared with January, as listening in the homes via bluetooth speakers and other consumer electronics technology has helped mitigate the impact of reduced car listening. Frear did appear to dodge a question regarding parent company Liberty Media possibly increasing its investment in iHeartMedia saying, "At SiriusXM, we got our heads down and focused on Pandora products, SiriusXM products. We're 100 percent focused on that."
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