SiriusXM radio presses play on deal with Pandora

NEW YORK — Subscription radio company SiriusXM says it is buying music streaming service Pandora Media Inc. in a deal valued at about $3.5 billion that will allow it to expand its service beyond cars and into mobile devices and homes.

Pandora has faced intense pressure from competitors such as Spotify and Apple. Its last quarterly profit was in December 2014.

But a buyout by SiriusXM, which made a $480 million investment in Pandora in June 2017, may be the boost the business needs.

The ability to provide a subscription service that gives Pandora customers access to streaming music and satellite radio could help set it apart from its rivals and likely would draw new customers. And SiriusXM’s relationships with automobile companies will open the door for Pandora to have better distribution in that market.

Meanwhile, the deal will help SiriusXM tap into Pandora’s mobile strength while giving it the chance to improve in areas such as making personalized listening recommendations.

New York-based SiriusXM Holdings Inc. has more than 36 million subscribers in North America, while Pandora has more than 70 million monthly active users.

Maria Ripps of Canaccord Genuity noted that data from the Recording Industry Association of America indicate consumers are increasingly moving away from physical music purchases such as CDs, as well as from digital downloads, in favor of streaming. Streaming subscriptions are the fastest-growing segment of the music market, with paid subscription revenue up 37 percent in the year’s first half, Ripps said in a research note.

Shares of Pandora rose nearly 3 percent Monday. SiriusXM’s stock tumbled 7.5 percent.