If you’ve paid attention to recent Ford (F) TV commercials you might have noticed something that could be a serious threat to Sirius XM‘s (SIRI) market share. Some of those ads show drivers in new Ford cars downloading tunes from Pandora (P) as they drive.
These ads indicate that Pandora is trying to go after drivers in a big way. It already reaches large numbers of them through its apps for smart phones and other mobile devices. A lot of drivers use these because they can access Pandora for free over them, while they would have to pay for Sirius.
As the Ford ads demonstrate, Pandora has already had some success getting its app into cars. Since most vehicles these days have computers built into the dashboard, it shouldn’t be hard to add a simple app like Pandora.
That means that Pandora is a huge threat to Sirius’s car radio business. If Pandora could succeed in getting just a share of that, it could seriously undermine Sirius’s long-term profits. Drive-time listening and entertainment has been the backbone of Sirius’s business.
Sirius does have one huge advantage over Pandora in this arena, it offers a lot more than just music. Not everybody likes to listen to music and many music fans occasionally listen to something else. Sirius’s dominance in sports in particular should help preserve its market share.
Mobile advertising revenues to surge, likely helping Pandora and Sirius
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