John Malone of Sirius XM has his eye on Pandora, and $3.5 billion is the price he’s ready to pay to acquire it. Sirius currently has 30 million paying subscribers, with Pandora bringing in more than double that amount. With Spotify and Apple Music rapidly rising to the top and the latter only joining the fray a few tears ago, competition will be rough. A big factor in the game is free vs. paid services: Pandora currently offers a $9.99 premium subscription but does not compare in numbers to its competitors…or even Amazon, as it stands right now. To his above the competition, Pandora has to add something more cutting edge than its on-demand competitors, especially considering their pay higher royalty rates. The deal will close by the end of next year.
Chief Executive Officer of Pandora Roger Lynch summed it all up in a statement: “We’ve made tremendous progress in our efforts to lead in digital audio. Together with SiriusXM, we’re even better positioned to take advantage of the huge opportunities we see in audio entertainment, including growing our advertising business and expanding our subscription offerings. The powerful combination of SiriusXM’s content, position in the car, and premium subscription products, along with the biggest audio streaming service in the U.S., will create the world’s largest audio entertainment company. This transaction will deliver significant value to our stockholders and will allow them to participate in upside, given SiriusXM’s strong brand, financial resources and track record delivering results.”
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