Pandora Receives Much Needed $480 Million Cash Infusion From SiriusXM

Last year, there were reports floating around that steaming music service Pandora was open to takeover bid from SiriusXM. Well, the new year arrived and nothing ever came of those reports. However, SiriusXM is once again circling Pandora, but it’s not going for a full-blown acquisition.

Instead, SiriusXM is entering into a strategic partnership with Pandora and will invest $480 million into the company. "The investment from SiriusXM infuses resources to help Pandora continue to grow and innovate," said Pandora CEO and founder Tim Westergren. "With the strategic review behind us, and a strong balance sheet, we look forward to focusing on business execution and the optimization of our strategy."

pandora playlist

It is expected that this cash infusion will allow Pandora to better compete with streaming music service heavyweights like Apple Music and Spotify. Spotify has roughly 50 million paid subscribers, while Apple Music is well behind with just over 20 million. Pandora has around 81 million overall listeners for its streaming music service, but less than 5 million of those are paying customers. Some analysts believe that Pandora could top 32 million paid subscribers by the end of 2018, but that seems like a tall order to fill for the streaming company.

On the other hand, the deal with Pandora gives SiriusXM the chance to not only tap into the streaming music market, but it provides access to millions of customers who primarily listen to music with their smartphones. SiriusXM customers now are more heavily weighted to listening to music in their cars.

"This strategic investment in Pandora represents a unique opportunity for SiriusXM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where SiriusXM does not play today,” said SiriusXM CEO Jim Meyer. “Pandora's large user base and its ability to provide listeners with a personalized music experience are tremendous assets. With its strong technology and new product offerings, we believe there are exciting opportunities for Pandora to accelerate its growth and increase value for Pandora and SiriusXM stockholders."

It is not known how exactly this partnership will play out, but it will be interesting to see which company stands to gain the most in the long run.


Tags:  Pandora, siriusxm
Via:  SiriusXM
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