Despite the aggressive growth of personalized, “online radio” offerings such as Pandora (NYSE: P) and Spotify, which recently arrived in the U.S., Sirius XM (NSDQ: SIRI) Satellite Radio says it expects to add 1.6 million net subscribers this year, a revision upward from its previous projection of an increase of 1.4 million.
Sirius added more subscribers in Q2 than in any quarter since the merger of Sirius and XM, said CEO Mel Karmazin in a statement. The company ended the quarter with about 21 million subscribers, up 8 percent from a year earlier.
Subscriber additions have been on an upswing for the past year. The additions were related mostly to higher auto sales, something that challengers like Pandora have been pinning their growth hopes on as well. With the economic weakness showing little sign of fading, that could effect auto sales and in turn, halt Sirius’ rise.
So far, though, the signs have been good, as Sirius has held down cancellations and customer acquisition costs.
Average self-pay monthly churn was 1.9 percent in Q2, compared to 2 percent in the first quarter and 1.8 percent in Q210. Subscriber acquisition costs for each subscriber addition was $54, an 8 percent improvement from $59 a year ago.