SiriusXM to Launch Spotify Competitor in Bid for Gen Z Streaming Spend

SiriusXM is expanding beyond radio formats, getting into music streaming to adjust to the ways that younger generations consume content.

The company announced this month that, in mid-December, it will launch its new SiriusXM streaming app, which includes personalized recommendations, new discovery features, a revamped audio library and more.

“The introduction of the new SiriusXM streaming experience marks a pivotal moment in our history, one that kicks off a new era of innovation at our company,” SiriusXM CEO Jennifer Witz said in a statement. “And this launch is just the beginning; we will continue to iterate and develop our product offerings throughout the next year. … [We are] welcoming in a new generation of listeners, bringing them closer to what they love.”

The move comes as part of the broadcasting company’s efforts to expand its reach with younger audiences.

“Our growth audience is millennials and younger, who are willing to pay for an experience,” Witz said at an event announcing the launch, according to CNBC.

Gen Z consumers are disproportionately likely to spring for subscriptions. According to research featured last year in the Subscription Commerce Tracker, a PYMNTS and Vindicia collaboration, Gen Z spends the most on subscriptions, paying $377 a month.

Plus, the PYMNTS Intelligence report “The Impact of Subscription Models on Consumer Choice” found that Gen Z consumers disproportionately tend to fall into the multi-model persona — highly valuable subscribers who enjoy multiple subscriptions of more than one type.

Granted, offering the platform is just the first step to reaching these younger consumers, with the content itself also playing a role.

“Younger generations represent a reasonably significant size of our in-car funnel, as well as our streaming funnel,” Witz told analysts on SiriusXM’s last earnings call. “So, we’re bringing the younger consumers into our products. We now just need to better satisfy their needs once they get there.”

Regarding the content, the company worked closely with Uncommon Creative Studio, a leading creative agency, to develop a strategic brand platform and creative vision meant to appeal to both current and future subscribers. Uncommon will continue to work with SiriusXM on upcoming creative campaigns, including one for the upcoming holiday season.

The app will compete with leading audio streaming services such as Spotify and Apple Music. SiriusXM currently has 34 million subscribers, per the company’s last earnings report, while Spotify, meanwhile, reported 195 million Premium subscribers and 456 million total monthly active users as of the third quarter.

Streaming revenues overall are on the rise. Universal Music Group shared in its last earnings report that it is seeing increased revenue from paid subscription platforms, up 6.7% year over year, with Chief Financial Officer and Executive Vice President Boyd Muir noting that this increase was “driven primarily by the continued solid growth in the number of subscribers.”