Sirius XM Satellite Radio reported record revenue and earnings Tuesday as it opened the door on a new product: Internet radio. The company's 2012 revenue grew 13% to a record $3.4 billion while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 26% to $731 million. Net income ballooned to $3.47 billion because of a $3 billion income tax benefit.
As previously announced, Sirius XM added 2 million subscribers in 2012, the best year since 2007, the year before Sirius and XM merged. The company ended the year with 23.9 million subscribers. To put that in perspective, Sirius XM is not far behind Netflix, which ended 2012 with 25.5 million paid U.S. subscribers to its streaming service (it had another 8.2 million subscribers to its DVD rental service). On the other hand, on-demand music subscription services like Spotify and Rhapsody have about 1 million subscribers apiece in the U.S.
Sirius XM subscribers will soon get a Pandora-like listening option in addition to the satellite radio service. During Tuesday morning's earnings call, CEO Jim Meyer gave an overview on the overdue Internet radio service that previous CEO Mel Karmazin first announced last year. Called MySXM, the service will allow users to create personalized versions of existing Sirius XM music stations. Subscribers can start with channels they already enjoy and fine-tune the music using "unique slider controls."