SiriusXM and Pandora test bundle discounts

It’s been less than a year since SiriusXM completed its $3.5 billion acquisition of streaming music service Pandora, but the two companies have already leveraged their collective assets to boost each other’s services. For example, SiriusXM talk shows arrived on Pandora as podcasts, while a Pandora-powered station now streams popular songs for both sets of listeners. Now, the company is considering tying the two services together in a different way — by packaging them as a discounted bundle.

What that bundle deal will look like isn’t yet known.

Pandora today offers four tiers of service: a free ad-supported version, the $4.99/month Pandora Plus service, and the $9.99/month Spotify rival Pandora Premium. It also offers a multi-user Pandora Premium Family plan for $14.99/month.

SiriusXM, meanwhile, also offers its own set of packages, with the most popular being a $5/month plan for the car and home (via an Echo device), an $8.25/month plan for in and out of the car, and an $8/month plan for streaming outside the car only.

Before rolling out a bundle deal, the company wanted to know what sorts of package price points and features customers would respond to best.

The company confirmed it’s been testing different cross-promotions, including those aimed at both Pandora and SiriusXM subscribers that offered discounts if you sign up for the other service. Essentially, the company wants to know what price point makes sense for consumers when it comes to subscribing to both services.

Today, these cross-promotions are aimed only at people who already subscribe to one or the other service, so it’s not really being marketed as a “bundle” deal yet. It’s just a promotion, if you want to get technical about the terminology.

“We would email our Pandora listener base or the SiriusXM listener base — we would test it with different user bases as a promotion,” Chris Phillips, SiriusXM/Pandora Chief Product Officer & Head of Technology, told TechCrunch. “We actually have a formal study going on to do it,” he said.

SiriusXM and Pandora haven’t yet settled on what a potential bundle deal will look like, but it aims to make a decision based on its tests this year.

“The power of the Sirius brand and power of the Pandora brand are very distinct. And people see unique value in the two,” Phillips added.

One challenge, however, is that people don’t understand that SiriusXM and Pandora are now one company, so the promotional emails confused them.

Similarly, people often find the language around “Pandora-powered” stations in SiriusXM confusing, as well.

One potential solution is to pick one consumer-facing brand and merge assets, including both programming and apps.

When asked if the two apps may merge into one in the future, Phillips said the company is “looking at what those opportunities might be.”

In the meantime, the company continues to explore how it can enhance both products using assets it has from the respective products.

“We are cross-pollinating content and features…into the distinct [user interfaces],” he said.

A recent example of this includes a new button within the SiriusXM app that allows you to launch a Pandora station based on what you’re currently streaming. And this new Pandora-powered station can then play right in the SiriusXM app — you don’t have to launch Pandora separately to hear it.

Efforts like this are aided by the fact that SiriusXM immediately put the two companies’ development groups together following the acquisition.

“We’re giving listeners choice. But when we give them choice, we want them to be able to have the best of what we offer in many places,” noted Phillips, of these sorts of integrations. “In the future, the idea that there’s a single opportunity — we’re looking at what that might be,” he said.

Nothing is yet determined, so all these plans could change, of course.

SiriusXM ended 2019 with around 30 million self-pay satellite radio and a record high of 34.9 million total paid subscribers. In 2020, SiriusXM forecasts revenue of $8.1 billion and earnings of $2.5 billion (adjusted EBITA).

Combined, Pandora and SiriusXM reach 100 million U.S. listeners per month.