Listeners of Gen-Z female-targeted podcast ‘Call Her Daddy’ reacted with a mix of dismay, confusion, and excitement when SiriusXM announced they were signing its host Alex Cooper and her network ‘Unwell’ to a $125 million dollar deal. 

“Didn’t realize Sirius was still in business,” said one listener on the social media platform X. 

“As a pretty regular listener – I fear I will be finding a new podcast. Everyone wants you to sign up for one more thing, pay just a little more money,” said another on TikTok. 

Before closing her deal with Sirius in July, Alex Cooper’s self-hosted show consistently ranked number two on the podcast charts on Spotify, where it was exclusively available to listeners. The new deal will be available across all podcast platforms, but New York-based SiriusXM will maintain exclusive advertising and content rights. 

The move is the radio company’s latest attempt to call on younger listeners to save the greying XM industry. Sirius XM’s current core audience skews Gen X and spends more time listening in-car to traditional radio, according to their latest investor presentation. Avid podcast listeners are much younger, between the ages of 12 and 34, according to a report by statista. 

So far, Sirius says they’ve reached 60% of their core audience but only 10%  of their growth audience, or younger listeners, something they hope to remedy with new content offerings. 

SiriusXM CEO Jennifer Witz has touted the expensive talent signings, calling Cooper’s deal “one of the biggest announcements” from the third quarter on a call with analysts. 

“Alex Cooper’s Unwell, the Podcast Network, including its flagship Call Her Daddy, has strong resonance among millennials and Gen Z,” said Witz. 

“We see an enormous opportunity here to bolster our ad offerings, where we are already seeing positive momentum in the market, with presenting sponsorship, selling out quickly, and driving subscribers,” she said.  

These strategic moves by Witz come at a pivotal time for SiriusXM. They recently merged with their majority stakeholder Liberty Media in a move to simplify the ownership structure and increase financial flexibility. Sirius XM lost 1% of revenue between 2022 and 2023 according to their latest annual securities filing. Profits rose 4% to $1.26 billion, while free cash flow dropped a significant 22% to $1.2 billion.  

Though subscriptions to podcast plus plans were up, the company reported a 4% loss in revenue and a 3.38% loss in subscribers in the third quarter. Still, projected 2024 revenue is expected up over 27% year-over-year, at $8.675 billion dollars. 

“We are focused on executing our long-term strategy of strengthening our subscription business, enhancing our advertising offerings, and optimizing costs as we reinvest in the business,” said SiriusXM CFO Tom Barry of the results. 

Management cited softer-than-expected advertising revenue and a one-time non-cash payment owed to Liberty Media for their merger as the reason for the third-quarter dip. 

The company has spent $456 million dollars so far this year on content, which includes the hefty contracts paid out to top talent. It’s their second highest expense behind royalties and revenue share, and their spending has remained stable year-over-year since 2023. 

SiriusXM started to focus more robustly on programming in 2021 when Witz took over as CEO. That year, the company had spent $569 million on content - a 16.22% increase from the previous year. It has remained a steady part of the budget since then. 

“You’re seeing this bidding war for the talent because if you don’t own it then you can’t make any money off of it,” said David Trainer, CEO of investor research company New Constructs. 

“If you’re not in the business of creating original content or delivering live content you’re just dealing with somebody’s leftovers.” 

Cooper isn’t the only talent getting a substantial payday. Howard Stern famously makes an estimated $100 million dollars as the host of his self-titled show which consistently pulls the most listeners on SiriusXM by a landslide. The network also signed a deal upwards of $100 million dollars with the consistently chart-topping podcast ‘Smartless’, hosted by actors Jason Bateman, Will Arnett and Sean Hayes. 

Lower subscription prices are also part of the strategy to lure in younger listeners. SiriusXM has optimized programming on their out-of-the vehicle streaming app and introduced subscription plans for both app and auto to start at a record-low $9.99 a month. Management is hopeful the new price point will make them more competitive with streaming companies with similar payment structures. 

However, experts and investors argue that the company's tunnel vision toward increasing subscribers and app streaming may not be the best use of resources. 

Robert Routh, managing director of media at KBN partners, said that while he appreciates Sirius’s efforts to grow, he thinks their true bread and butter is still in-car audio. 

The SiriusXM radio that’s built-in to over 145 million cars across the continental United States and Canada is powered by a network of satellites that are exclusively owned by SiriusXM. 

“No other entity in the world has those licenses, and that spectrum is pretty valuable. And can, can, be used for other purposes in the future,” says Routh, who notes because of that patent he will maintain his optimism in the radio company, though it is being underutilized. 

Retail investors also share the sentiment that current management is putting too many eggs in the content basket. Alex Meyer, 32, has been a long-time holder in Sirius and gripes that Witz continues to make bets on a demographic that he doesn’t think will materialize. 

“When the news came out about SiriusXM getting Alex Cooper's Call Her Daddy Podcast, fans across all social media expressed their concerns about it going to SiriusXM,” said Meyer.

“Continuation of high-priced podcast deals is not the direction SiriusXM should be going,” he argued. 

One market mover in particular though, seems to be signaling a positive outlook in the satellite radio company. Warren Buffett’s Berkshire Hathaway has bought shares in multiple waves this year and now holds a 33.2% stake. Just last week, the company moved their position up 60.7 million shares, reinforcing its confidence in the stock’s value - despite its over 50% decline this year. 

On-air radio host Brian Bushner has been a long-time investor in SiriusXM. Having seen the decline of radio firsthand, he says he’s holding on to the stock exclusively because of Buffet. 

“I’m holding on because Warren Buffett keeps buying more stock. Why? I don’t get it but he sees something in there. If he sells, I think that will be what gets me to finally dump mine too,” Bushner said. Buffet has never mentioned the stake publicly himself. 

Looking ahead, investors and analysts will be closely monitoring subscriber numbers and free cash flow in particular, to see if these big bets may finally start paying off.

“Thus far, we've always said it's gonna happen,” Routh said, referring to a jump in subscribers. 

“It’s the kind of company where they are slow and steady, just growing slower than they used to. But they don't have to grow at all, as long as they keep going off that free cash and buy back stock,” said Routh.