Home Technology Sirius XM CEO Jim Meyer On Pandora And The Company’s Growth

Sirius XM CEO Jim Meyer On Pandora And The Company’s Growth

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The following is the unofficial transcript of CNBC EXCLUSIVE interviews from Liberty Media Investor Day across CNBC’s Business Day programming today, Thursday, November 21st. Sirius XM CEO Jim Meyer joins CNBC’s David Faber to discuss the Pandora, the company’s growth and more.

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MORGAN BRENNAN: We’re going to head back uptown to David Faber at Liberty Media’s Investor Day, sitting down in an exclusive with Sirius XM CEO Jim Meyer. David.

DAVID FABER: That’s right, Morgan. Yeah, we get these chances usually just once a year. It’s always nice to do it. Jim, it’s nice to see you.

JIM MEYER: Good to be here.

DAVID FABER: One year later. It’s been a good year for your company, I think that’s fair to say. Let’s start with Pandora. Last year, we were talking about the prospects of the deal, because, of course, it hadn’t really -- you hadn’t really yet brought it all together. That’s not the case any longer. What synergies can you tell our viewers about that you’ve seen in terms of two platforms, Sirius and Pandora?

JIM MEYER: Well, I’ll start with first I’m probably more excited about strategic rationale for Pandora today than I was, and I was excited, trust me, a year ago. But now I really feel that it is absolutely the right thing for our company. We’ve owned it about nine months.

The integration has gone well. We have done what I call easy but hard things, which is combine corporate functions and frankly exceeded what we thought were the kind of cost synergies we could get there, and the speed we could get them.

We have been very careful about leaving product development and marketing alone. We’re now beginning to integrate those into one team with -- so, we have one team focusing, for instance, on both the Sirius XM app and the Pandora app.

I expect that to generate real benefit down the road. You know, if you look at Sirius, for instance, two years ago, we probably had, you know, 250 people maybe working on digital transition. Take that now combined with Pandora, we’re at a thousand. And, when those road maps kind of converge, it will give us the opportunity to use those thousand for even more powerful things. So, I’m really, really, pleased about that.

DAVID FABER: Well, also. Cost is not easy but easier sometimes to identify in terms of taking out revenue synergies, harder to come by. I mean, are there any real benefits in terms of either platform benefitting from having the other that will generate higher revenue growth and otherwise would have been the case--

JIM MEYER: So, I definitely believe there will be. And we’re continuing to test a lot of things. We have began just recently moving and testing some Sirius content as part of Pandora offering, creating windows perhaps when it’s available at payroll and when it is available free. And we’re learning a lot. I do believe it will yield big results. We’re, you know, we’re big in digital advertising.

We’re the leader in digital audio advertising with well over a billion dollars. I tell you why I think that’s really important, David. One thing I’m sure of, I have two grandchildren. I’m positive they’re going to consume audio. I’m positive of it. You know, one of the great things about what we do is we know people love our product.

What I’m not positive is what the revenue models will be five years or ten years from now. So, in my opinion, you have to get really good at subscription. We are. You have to get really good at digital advertising. We now are. And you have to get really good at cross promotion between the two. And that’s the part where we’re going to have to work hard over the next 18 months.

DAVID FABER: Podcasting is something we seem to be talking more about than a year or two years ago. I’ve had a conversation with Daniel Ek at Spotify about it. And they’re spending big on it. You guys also—I mean, Sirius, obviously, you have the shows, you have the personalities already, in terms of Howard Stern and so many others. But does podcasting become a more important part of the value proposition of Pandora as well?

JIM MEYER: Yes, without question. I mean, there are debates on what the slope of the lines will be on podcasting. There’s no question where the north is. It is going to grow exponentially.


JIM MEYER: Because people have always loved talk content. It is good for you, by the way. They’ve always loved talk content. Younger people consume it differently than people from my generation. By the way, I continue to believe in talk. There will always be shows, there will always episodes, and there will always be ways to cut it in snippets for different attention spans and you know, different intentions. And so, we’re in the middle of that whole thing getting mixed together and where are we going to end up.

One of the podcasts I’m really excited about is we announced in the last earnings call an association with Marvel. And, you know, these guys, everything they touch just seems to be magic. They’re creative geniuses. We’re really excited about the effort they’re putting forward. And I think what you’re going to see is kind of what I just described.

You’re going to see an effort with Marvel kind of on a channel, you’re going to see an effort with Marvel that’s episodic and you’re going to see an effort with Marvel that’s more podcast oriented. And then we’ll put it out there and we’ll see which way, you know, consumers go. The beauty is today, by the way, with the combination, we now have 100 million listeners. We have 38 million self-paying customers between both platforms in North America.

Another 65 million that are in the free service in Pandora or in a trial somewhere with Sirius XM. It gives us tremendous leverage to take things, test them across and find out which way people enjoy them more. I think we’re going to find they enjoy them multiple ways.

DAVID FABER: Right. So, we can expect a proliferation of podcasting listening opportunities.

JIM MEYER: Yes. We have a little work to do to catch up on some of the technology side. And I think you’ll see us very focused on that in the next three to six months.

DAVID FABER: What does that mean? What are you lacking, in in terms of technology? What do you need to do?

JIM MEYER: You need to be very good, and it’s one thing I learned in the last nine months. Ad tech, advertising technology, is crucial, and you need to be very good at it, as it relates to particular--

DAVID FABER: So, being able to, what, insert different ads at different times in different ways with podcasts?

JIM MEYER: Yeah, we’re great at it in music. We’re great at it in music. We’ve got a transition that Pandora never did it for spoken word, we have to get that bridged in the next couple months.

DAVID FABER: Well, something we always have to talk about is just automotive in general, and what you are seeing in terms of trends--both new, used, you know, anything alarming to you? I know, car is staying pretty much – fairly high.

JIM MEYER: It’s a great country.


JIM MEYER: I know with what’s going on in Washington this week, it’s hard to believe. But it is the American customer, at least in our opinion, is really feeling really good. The car business is great. Sure, it is going to moderate between 17.3. Do I like 17 better than low 16s? But even at low 16, it’s still fabulous. The business right now, I can tell you, is really good. I mean, what we’re seeing, kind of for what we saw in October and then my contacts in the car industry are still fairly bullish, the used market is really good now.

And so, I just don’t see, I’m not, maybe I won’t see the wave, but I’m just not worried what that business looks like. When you look at the car business itself, the retail and wholesale inventories are in fabulous shape, which is always, you know, a good sign of health to me. So, I don’t see the storm clouds right now.

DAVID FABER: Right. And, finally, we end every interview with the same question. You keeping Stern happy?

JIM MEYER: Keeping him happy, and we just love him. I don’t know if you saw, he opened our brand new studio out in Hollywood three weeks ago. And I think even Howard impressed himself with what a big star he is. Because the quality of the shows, and the lineup of stars we had to support him was outstanding. We’re just -- we love Howard. And we want Howard with us as long as he wants to be.

DAVID FABER: Quite a lucrative partnership for you both.

JIM MEYER: Thank you very much.

DAVID FABER: Yeah. You’re welcome. Jim, thank you. Always appreciate you taking some time. Jim Meyer, CEO of Sirius. Back to you guys.

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