SiriusXM said Thursday that fewer auto shipments offering trial subscriptions resulted in a decline in paid promotional subscribers in the second quarter — the first quarter in which the business was operating completely under the harsh economic conditions brought about by COVID-19. Paid promotional subscribers refers to subs included with the purchase or lease of a car.
The satcaster said it added 264,000 self-pay customers in Q2 but lost 768,000 promotional subs. It ended June with 34.3 million total users, including 30.3 million self-pay customers — down 516,000 overall.
But CEO Jim Meyer, who called the company’s business “resilient,” was upbeat on the results.
“Despite the incredible economic stresses brought about by the COVID-19 pandemic, our self-pay net subscriber additions grew by nearly 200,000 over the first quarter of the year, and we reported improved churn of just 1.6% per month with rising ARPU,” he said in a statement, referring to average revenue per user.
“Although advertising revenue fell 34% in the quarter, substantial expense savings in SAC [subscriber acquisition costs] and other areas provided a complete offset, and we generated over half a billion dollars of free cash flow. We are investing in our business, our people, and external opportunities to position ourselves for future growth.”
Self-pay subscribers gains were recorded in both its satellite radio and Pandora businesses.
SiriusXM said satellite radio subscribers — with promotional subs included — fell in Q2, continuing a trend from Q1. A year ago the company added 174,000 net users.
For the full year 2020, the company expects it will add about a half-million SiriusXM net self-pay subscribers, with total revenue reaching $7.7 billion.
Pandora added a net of 40,000 self-pay subs in Q2. That’s compared with 64,000 a year ago. The music-streaming service ended June with about 6.3 million self-pay subs. There was a decline in monthly active users, however: from 64.9 million a year ago to 59.6 in Q2. Advertising revenue at Pandora was down 31% to $211 million.
Total revenue for Q2 came in at $1.9 billion. That’s a decline of 5% versus a year ago. Earnings declined 7.6%, from $263 million to $243 million in Q2.