US pay-radio operator Sirius-XM, which already has some 27.7 million subscribers, says it is ready for the next stage of its development. Speaking to Jessica Reif Cohen, senior media analyst at Bank of America Merrill Lynch, Sirius-XM’s CFO David Frear told delegates to the banker’s media conference that the operator had a “bunch” of science experiments going on, each of which was potentially possible to appeal to 200,000-300,000 clients, and generate extra ARPU as well as bring in new subs.
Frear said they were looking at adding those 200,000-300,000 clients with extra value telematics services, using the operator’s satellite feeds to connect with the vehicle. “If [we] can get 200,000 people to take a product here or 250,000 to take it there, it’s like [each are] $100 million a year businesses, they by themselves driving more free cash flow to the platform.”
Frear also said that Sirius-XM had a cash warchest ready to buy a suitable business. “There’s a lot of people that are playing in the telematics space that we’ve looked at. And so we maintain a very active queue of looking at opportunities.”
Currently, Sirius-XM operates two near-matching services but duplicated on either their Sirius satellites or their XM spacecraft. Asked how this might pan out, Frear said: “So the question is as when we get to that point in time, what’s going to monetize the best? Should we just double our audio channels? Should we go to high fidelity audio? Is there a big data play to be provided, or should we bring video to the car? I mean people are talking about the autonomous car world. And as I think autonomous cars in terms of being available in any significant scale is a good decade away, but as it gets there, video to the car is a logical thing in, and there is no doubt that we have best platform for taking video to the car.”