SiriusXM CFO David Frear: 'Labels Are Holding All the Cards'
SiriusXM finance chief David Frear is unfazed by competition for his satellite radio company from music streaming services like Pandora, Spotify and Google Play.
"We used to worry a lot about the streaming providers," he told an audience of investors Tuesday at a Goldman Sachs conference in New York. "But over the past five years, we can't find the effect on demand."
Painting a picture of SiriusXM, which boasts 32 million subscribers in the U.S. and Canada, as a David amid Goliaths like AM/FM radio and app-based subscription services, both of which number in the hundreds of millions of monthly users, Frear stayed modest about Sirius' technological goals while sounding notes of superiority over smartphone-based rivals.
"We are not a music distribution service," he said, stressing that most Sirius customers use the product in their cars. "We are radio."
Asked to comment on a theoretical merger between Pandora and Spotify, the exec didn't see many advantages to large-scale consolidation in the streaming space.
"One is ad-based, one is subscriber-based. They each pay a huge amount of money to the music industry," said Frear. "There is no advantage to this kind of thing on the content side."
Despite thinking of itself as a radio company, Sirius is still launching a new product that shares a lot of the same interactivity features that music apps use. The New York-based company's new 360L platform accounts for user preferences and behaviors to make suggestions and recommend transactions, just like Google Play or Rhapsody.
"There's nothing about the functionality of these kinds of products that requires us to go out and buy something," Frear observed. "The coding is not an insurmountable task, if we think it's necessary."
He noted that the next benchmark to evaluate the SiriusXM business model will be the success of Android Auto and Apple CarPlay, two smartphone platforms for cars currently being developed, which could cut into Sirius' core business.
"You know, when BMW put a jack in their cars in around 2005," Frear said, "everybody thought we were going to be dead in a couple years."
This article was originally published by The Hollywood Reporter.