The Pandora streaming music service has been around for a very long time and has a fair share of users. Now it’s time for a new chapter in the company’s future. Sirius XM Holdings is purchasing the Pandora streaming music service for a cool $3.5 billion U.S. dollars. The deal is an all-stock transaction which will combine the 36 million users Sirius and the 70 million Pandora claim.
SiriusXM Chief Executive Jim Meyer said in a statement that the acquisition “diversifies SiriusXM’s revenue streams” and broadens the company’s “technical capabilities.”
SiriusXM was already well acquainted with Pandora. Last year, the New York company made a $480-million cash investment in Pandora, a deal Meyer said would help SiriusXM expand into the “ad-supported digital radio business, a space where SiriusXM does not play today,” according to a statement released at the time.
As of Monday, SiriusXM owned a stake in Pandora of about 15% on an as-converted basis.
While Pandora streaming music is still widely used, recent entrants such as Spotify, Google Play Music, Apple Music, and Tidal are making the competition stiffer. Pandora was one of the first music streaming service available and did very well for a very long time. With a combo of satellite services and web streaming services, this merger is a big deal for both companies. The deal has already been approved by both boards and should be sealed and complete by Q1 2019. It will be interesting to see what comes out of the purchase and how Sirius manages both services.
By the end of 2017, Pandora had lost about 8 million listeners year-over-year. The company set out to improve its technology for advertisers, and by July, Pandora had seen subscription revenue up 67%, according to the company’s second quarter financial results.
Last Updated on September 24, 2018.