Here's why SiriusXM is purchasing Pandora for $3.5 billion
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SiriusXM said Monday that it is acquiring Pandora in a $3.5 billion deal that aims to create an all-encompassing digital audio offering that will reach some 100 million users in their vehicles, in homes and on mobile devices.
During a call with investors this morning, Jim Meyer, chief executive at SiriusXM, said many potential new listeners try out the satellite radio service when they get a new or used vehicle, but often do not become paying subscribers.
On that score, the company sees some 23 million trial customers each year, but it only has 36 million paying subscribers. When coupled with Pandora’s 70 million monthly active users, however, the company feels it can win even when listeners don’t subscribe. The combination will also help Sirius expand beyond an audience that largely listens while driving.
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