Sirius XM (SIRI) Presents at Deutsche Bank Annual Media, Internet & Telecom Conference (Transcript)

Sirius XM's (NASDAQ:SIRI) Deutsche Bank Annual Media, Internet & Telecom Conference Call March 9, 2021 4:00 PM ET

Company Participants

Sean Sullivan - CFO

Conference Call Participants

Bryan Kraft - Deutsche Bank

Bryan Kraft

Okay. Thanks everyone for joining us this afternoon. I'm Bryan Kraft, I cover the Media, Cable, Telecom sectors for Deutsche Bank. And I'm really pleased to introduce Sean Sullivan, the Chief Financial Officer of Sirius XM. Sean joined the company in the fall September, October time frame. And I believe this is the first time that he's doing a formal Wall Street conference as the CFO of Sirius XM. So welcome, Sean, and thanks for joining us today.

Sean Sullivan

Yes, thanks for having me.

Bryan Kraft

Sean, as the new CFO of the company, tell us what attracted you to Sirius XM? And what do you think of the company and long-term prospects now that you are four months into it?

Sean Sullivan

Yes, so excited to be here. It's been, I guess, the end of October, I joined. So only about four short months, as you said. I guess as I looked at the opportunity, Bryan, first and foremost, the people attracted me to the company. Obviously, the ownership, the controlling shareholder, to participate and be part of the management transition and support Jennifer and her ascension into being the CEO, number one was a great opportunity, I thought for me, both professionally and personally.

So, I've always been a longtime consumer of Sirius XM, not only in the car, but during my commuting days from Connecticut into the city. I've active digital Sirius XM app user, I guess we're almost up on a year of not doing that. So, big fan of the brand, big fan of the consumer value proposition, big fan of the obviously the content and what the content that's offered. So, those are obvious and those were attractive qualities. Now that I've been here for months, obviously, great brands, great content, a little bit more about the reach, both on and off platform, I think it's incredible.

I think the growth potential that the company has given the assets and I'm sure we'll talk about some of those obviously, with podcasting be probably the most recent avenue for growth and investment for the company.

So, again, it's got a great position in the car. I think it's got a great opportunity for growth out of the car from a digital perspective. And then the 360L rollout, I think, brings a new dimension to our position, not only from a linear broadcast, but also doing that and delivering more user focused content on IP basis. So, all-in-all, I think it's I'm thrilled to be here, and I do think that the growth opportunities are pretty attractive.

Question-and-Answer Session

Q - Bryan Kraft

Okay. Great. Sean, despite the challenges of the pandemic 2020 ended up actually being a really strong year for financially for Sirius XM. Can you just walk through some of the key highlights from 2020s performance? And how the company was able to navigate those turbulent waters?

Sean Sullivan

Sure. I obviously lived a bit of in the video world before I got here, and only can really speak to two months of what went on. But it really attributes to the team in terms of how resilient the business was in 2020. We had the impact of auto sales early in the year. We had the impact of the advertising marketplace, obviously, at the end of Q1 and Q2. But the company transitioned very quickly to remote content production. I think they've adjusted, we adjusted very well on the subscriber management side in terms of call centers. And all of that, as we talked about a lot on the year-end conference call is, we had the fourth consecutive year of declining churn.

So really incredible performance in a turbulent uncertain marketplace. As you know, the self-pay net ads actually ended the year above what the original guidance was at the start of 2020. And to be able to deliver revenue EBITDA, free cash flow growth, year-over-year is just a real testament to the business model, and the opportunity. ARPU increased again, which is great metric for the company.

We did have a difficult time rebounding on the advertising side, as you know, we just couldn't recover, but really encouraged as we exited 2020 and Q4 was really, really strong demand, really, really strong monetization.

What else to say, I mean, I think other highlights, long-term goal of the company was to get to penetration rates of 80%. We exited the year that way. I think that's up from roughly 73% in 2019. So, again, I think a long-term held goal of accomplishing that 360L is ramping up. I know we'll talk about it.

The advertising, digital advertising platforms that we now have I think was a great growth opportunity, will continue to be. And during all of that, the company was able to complete the Simplecast, the Stitcher acquisition, investing in SoundCloud, so I think made some smart capital allocation decisions to really enhance the strategic position of the company long-term.

So all-in-all, 2020, I think a remarkable year in light of probably where we all sat roughly a year ago in terms of what the uncertainty was.

Bryan Kraft

Sure. And let's talk about some of the key drivers of the satellite radio business or the Sirius XM segment. How is the management team continuing to focus on increasing the top of the sales funnel to bring in more conversion opportunities for Sirius XM?

Sean Sullivan

Yes, the biggest part is to continue to drive the pen rate. So, as I said, we eclipsed 80% as getting in 2020, obviously, depending on what SAAR estimates you have, with 16 million or thereabouts that obviously creates a tremendous amount of trial starts for us.

The used car pen rate is roughly half the cars sold and we will continue to increase our new car penetration rate, certainly extends ultimately the long tail of used car trials as well. So, I think that really helps in terms of the top of the sales funnel.

I think digital subscribers and growth in digital only subs is a big part and hopefully that will give us top of funnel opportunities as we continue to see engagement, both out of the home and out of the car and in the home and connected devices. So, I think that's a great opportunity to drive that. We've got to do a great job just on the personal sales and getting trials and conversions.

And back to the car 360L, obviously, we would hope that that will help in the conversion rates and give us a real good opportunity to enhance that funnel opportunity too. So I don't think anything new there in terms of where the focus has been. I just think that as we look at '21, we'll see continued opportunities to really enhance that.

Bryan Kraft

Okay. And let's talk about your relationships or Sirius' relationships with the OEMs on the auto side. You've had a steady flow of contract extensions with automakers. What are those relationships like today? How are the OEM skewing satellite radio as a feature in the cars and trucks? And what are the high-level things that are changing as agreements are renewed?

Sean Sullivan

Yes, I don't think anything is changing. I mean, this has been, what, 10, 20-years we've had these relationships. The OEM relationships are obviously critically important to us. I think our interests are aligned. I think we're incredibly supportive of them. They're incredibly supportive of our products. The renewals that we talked about, we continue to focus, obviously, on pen rates. We really think that's the great opportunity there. I think our relationships with OEMs gives us a great view into future model year and future intentions by the OEMs in the car.

I think we work incredibly well with the OEMs to maintain our position in the vehicles, and obviously 360L is a big part of that transition. And we intend to work well with the OEMs. We intend to work well with their partners, like Google and others, so that we can have a unified relationship and a great presentation, the vehicle ease of use, personalization, all of the things that I think is the promise of what we deliver in the vehicles.

So, all in all, I think the relationships and the renewals are fairly consistent, and I think they're mutually beneficial. So, I don't really see a big change there.

Bryan Kraft

And how much more runway do you have in used cars to grow that trial funnel? And what do you need to do in order to capture that in coming years?

Sean Sullivan

I think just, I guess what we need is time, certainly going 80% over time, from where we're at today 50% is a significant 60% growth opportunity as we think about the new cars, and obviously the turnover and fleet from new into use. So, I think it's a great opportunity, it's a long-term opportunity. I do think we need to continue to improve our ability to sell subscriptions into used car. We certainly have good relationships with a lot of dealers, a lot of other service organizations, et cetera. So, I do think there's a lot more room to grow. They're just really a function of time, Bryan, at this point.

Bryan Kraft

Okay. And you mentioned on the earnings call on your earnings call that streaming first subscribers were a meaningful portion of net ads in 4Q. Do you see that contribution continuing and growing in the future? Does it seem sustainable on a go forward basis?

Sean Sullivan

Yes, as I said in my, I think the opening remarks about what attracted to me I think, the digital transition, I think this is a real exciting path for growth for the company. So, I do think that, I see a great opportunity. It's a big part of our management team's goals, in 2021 and beyond. Again, not everybody has a car, not everybody, I guess, needs an in-car subscription.

The number of streaming only serves as a small portion, today as you know, the base. I don't have much more to say than we talked about in the earnings call. But I think that's a great opportunity over time, I think it's a large addressable market. We have to as you know, in a direct consumer business churn is something we're going to have to manage.

I think the economics of a digital-only sob are attractive to us. So again, I think it's a big opportunity and potentially a big unlock. So, we're focusing a lot of time, effort, energy, a lot of digital product investment to enhance the user experience. So I'm excited about the ability to really drive growth in terms of the streaming first subscribers.

Sean Sullivan

And on the churn side, self-pay churn actually declined in 2020 from a very good 2019 level, which I think surprised a lot of people just given economy. Why do you think retention was so strong in a year with such macroeconomic challenges, and one in which most office workers were no longer commuting?

Bryan Kraft

Yes, now it's fascinating one. As you said, voluntary churn and churn held up very well. Vehicle related churn, even non-paid churn, given the macroeconomic environment did far better and offset the voluntary churn we saw. So, we've talked a lot about it. I think mobility meant a lot of different things to a lot of different people during this pandemic. I don't think there was as big of a widespread lockdown, as we all know, in many parts of the country.

What's interesting to me as a consumer is, and being a SiriusXM is what - has the nature of driving potentially changed? Maybe people are more apt to own a car as opposed to do a ride sharing. Maybe people find commuting by car versus public transport. I think there was an article in The New York Times are a stat I saw recently where, the bridge and tunnel traffic in New York City for example, has met back to pre-pandemic levels, by virtue of people not wanting to ride public transportation, I think gridlock in New York City is as brutal as ever.

So I think it's really interesting in terms of what it's been able to do. We've been able to maintain churn, and we haven't seen the non-pay entry rates where we would have expected in terms of the economic hardships. So, maybe I think that speaks to the content and speaks to the value proposition. I think it speaks to people how they engage with our product, and are they engaging in the product through connected devices in the home out of the home. And, my hope is that that's in some respects a silver lining is this really gives us a bit of a boost in terms of changed consumer habits and how people view our service and how they engage in our service.

But, as you said, no longer commuting, but there's been a lot of metrics and stats for our company that have been really pleasantly surprising versus what our original expectations were.

Bryan Kraft

And you talked about 360L, as you mentioned a couple of times already, maybe you could give us an update on 360L. How large the installed base is at this point? How you see installations ramping? And what it means for the business long-term?

Sean Sullivan

Yes, I'll just reinforce some of the things, I think we'll have more to say over the course of '21. But as we've said in '21, we expect to have roughly 25% installed base in 360L. In the vehicles, our goal is to get to 80% by 2025. We did a lot of consumer research as a company, in terms of what the feature sets were, and should be. I think we're encouraged by the early reaction to the product. Again, I think we'll have more to say, over the coming quarters.

But the improved personalization, satisfaction, the feature sets, I think it's hopefully an important product, it allows personalization, as I said earlier, it has the best-best of both worlds, you have a linear broadcast, but you have the ability to, to enhance it on a direct consumer basis. We can offer up other content, including podcasts and other things.

So, I think the challenge and the opportunity for us will be to really ensure an increase awareness in the vehicle for all of the features and opportunities for the consumer. So, I think for the long-term, I think on a personalization and satisfaction, my hope is it improves conversion rates, and obviously, continues to please the consumer.

Bryan Kraft

Are there any, any statistics around engagement or churn or conversion or any other metrics that that you could talk about, based on the existing 360L base that you guys have seen?

Sean Sullivan

Yes, like I said, I think it's early. It's only, it's so recent. In some cases, we're still in trials. I think, Bryan, if you'll give me the opportunity to defer that until the next time we're together or, maybe after the Q1, Q2 earnings call, we'll have more to say about it. But I think we'll stick to what we said today.

Bryan Kraft

Okay, fair enough. On the Pandora side, Pandora returned to revenue growth in the fourth quarter. I understand part of that strength was from political. But can you tell us what you're seeing in terms of the core ad recovery at Pandora now?

Sean Sullivan

Yes, what we're seeing is very, very strong. I mean, demand through the fourth quarter was really incredible. RPMs climbed, I think, 19%, over $113. We really, again, we had some blower listener hours. But there was strong demand. Obviously, the monetization, I think the team did a wonderful job in terms of monetizing the available units. We did have the benefit, as you know of the Stitcher acquisition that we closed in October.

So, in terms of Q4, we did have some strength in terms of the Stitcher results as well. So, I think it bodes well for 2021. I think we're really excited about the opportunity to grow both on and off platform advertising. We certainly have the benefit of a full year of Stitcher in our results, too. But today, as I sit here through, a little over two months in 2021, I think the ad market has remained very positive. And we're pleased with the continued monetization and demand across the platform. So, really seeing I think, for the most part, a good recovery, I think that we're really pleased where we're at, and the indications are for '21.

Bryan Kraft

Okay. And looking beyond the cyclical recovery at Pandora, I know that stabilizing MAUs and listening hours has been a challenge. But can you tell us about any progress that you have made so far, and the company's plans to continue to push on that front?

Sean Sullivan

Yes, again, stabilizing the engagement in Pandora is obviously incredibly important and very much a key initiative that we have and continue to have. There's no question the business underperformed relative to expectations by virtue of the charge we took in the fourth quarter. But I think that what we're focused on is obviously the product features and improving those. We're trying to enhance the content opportunity. For example, and introducing podcasts and really bringing other opportunities to the Pandora users.

We still have a significantly large user base of monthly active users, even though we've seen some declines in that. And we're really focused on the product features, the content. We're trying to look for other ways to distribute the Pandora product, I think 360Lfor example is an example of that.

So, I think that we still believe in that it's a promising model. We still believe in the strategic rationale of the business. It does give us incredible ad scale, incredible ad technology, it gives us really incredible opportunity not only to monetize on platform, but off platform as well. And in terms of some of the other deals. So, I think the products, the capabilities and the people that we acquired as part of that acquisition really will I think enhance the overall enterprise, as we move to a more digital-centric world and other aspects of the business.

So all in all, it's been a bit of a challenge. We're hard at work and trying to make more project progress, but it's going to take some time.

Bryan Kraft

Okay. You mentioned podcasting that has clearly been an increasing focus for Sirius over the past two years. But the strategy is multifaceted. You've got Stitcher, Pandora, Sirius XM all three platforms. Can you explain the strategy in podcasting? And how it differs from or similar to other large players? And how you see it translating into shareholder value creation down the road?

Sean Sullivan

Yes. It's obviously podcasting is certainly all the rage in the marketplace for sure. I think in terms of our podcasting strategy, we focus on three constituents. We have our listeners, we have the content creators, and we have the advertisers. So we're trying to bring content to the center. We think that podcast is an important aspect of what listeners' desire in demand. So we think that it gives us more great content, it gives us the opportunity to cultivate existing talent in content that can do podcasts and extend, I think Kevin Hart is a good example of that, where somebody can have a channel, somebody can have a podcast, and somebody can have a channel on Pandora.

So obviously, we bring to the table now a very much a multiplatform, one stop solution, if I can say that, so that we can really bring content to the center and monetize and distribute across multiple platforms. So, that's really the opportunity. I don't think that's any secret. We obviously have creator tools with Simplecast and ability to monetize podcast to Stitcher, both on and off platform and other places.

So that's effectively what we're doing. I think we're moving into it in a disciplined fashion. I think we're doing a good job monetizing and cultivating content into the podcasting realm. We've done some ad rep deals, given the ad tech that we have, and the ability to bring a solution to other podcasts, people like NBCU, for example.

So, I think the advertiser solutions are now best-in-class. We've got great content, and we got a multi-platform monetization opportunity. So from a podcasting, I think that the opportunity is there. It's obviously a large, it's growing. And it's not a huge market today in terms of total size, but we're participating in it, we think there's some good growth there.

Bryan Kraft

Okay. And moving on to some of the financials, your '21 guidance implies a little more than 100 basis points of EBITDA margin decline this year, versus the 130 basis point increase last year. Can you talk about some of the puts and takes around costs and margins this year? And how we should think about 2021 relative to the longer-term outlook for margins?

Sean Sullivan

Yes, so in terms of - and I went through this on the year-end call, but just as a refresher, the 2021 is a bit of an unusual year. We've got some tough comps, I guess. It's a year where we're going to start to reinvest in certain parts of the business on a more normalized basis that I believe will deliver long-term real value growth and return outside of the 2021.

So what do I mean by that, obviously, as SAAR increases, we've got to reinvest in our sack and our marketing spend? In prior year, we've had some savings on the content side, when you think about, we didn't have a NCAA tournament. We didn't have a full major league baseball season. So, we did get some favorability in 2020 that will return on a more normalized basis in '21. We're investing in content, I'm sure we'll talk about programming spend, but we're investing in incremental content, like Drake. Drake, who launched his channel this week, actually, on Sirius XM.

So, content and duration and exclusivity, I think is obviously key tenants to our strategy. So, in some respects, 2021 has some unfavorable comps to '20, but I think that these are investments that will pay big dividends in years outside of '21.

And lastly, the Web-V and the Copyright Royalty Board, CRB decision is a year-over-year bad guy, as we talked about in terms of the - I think we've taken a practical approach to it. So that's also burdening the guidance. So, once that decision comes out on April 15, or thereabouts, we'll have a better sense of what the next five years look like.

So, all-in-all, you'll see some good revenue growth in the year, and then there'll be some reinvestment, that will really pay some returns outside of '21.

Bryan Kraft

Any thoughts on where consolidated margins could go over time relative to the current, low 30% range?

Sean Sullivan

Yes, I think the company historically has been focused on delivering growth, and has done that in terms of revenue EBITDA, and free cash flow. I know that we've, historically, as a management talked about margins being more of an output as opposed to an input. That being said, you know the components of the business, you know the strong margin profile that the Sirius XM segment has in the profile of the Pandora segment.

Again, I'm focused, I'll probably focus on a little more than just an output. I think there is operating leverage in the business as we bring these assets together and we really try to leverage the content opportunity in the distribution across all of our platforms.

So, I'm not going to actually guide to where I expect the margins to be. But certainly will keep my eye on them and look for opportunities to create leverage in the business. And the ad opportunity is a big one. And we've got a large-scale advertising business now, both on and off platform. We're doing certain rep deals. So as you know, some of those deals come with different margin profiles.

So, to the extent we can do smart ROI deals that may deliver less of a margin, I think we'd be prepared to do that. So, at the end of the day, we'll keep our eye on it, but I wouldn't expect you to see material changes over the near-term.

Bryan Kraft

Okay. And how should we think about the outlook for programming cost growth outside of music royalties over the next several years, just given the potential pressure from contract escalators, expanding the content offering, you mentioned, the investments you're making there, and also securing more digital sports rights and podcasts?

Sean Sullivan

Yes. I think you'll see us maintain our discipline first and foremost. I think we do ROIs and returns on every piece of content that we evaluate in terms of acquisition, renewal, or otherwise. I do think you'll see as Bryan invest more in content, because I do think having a unique and compelling, curated exclusive content, really is a differentiator beyond the former delivery of our business and our product.

So, I think you'll see us invest more. I think the ability to do that will be predicated on the fact that we now have more monetization opportunities and whether that be through Stitcher, whether that be through Pandora, or otherwise. So I think we're going to do it smartly. As you mentioned, we have done some sports rights, where we've acquired some digital rights to really enhance the value of the package to our streaming-only subscribers. We renewed Howard Stern at the end of 2020, much talked about. I mentioned Drake earlier where we've got the Drake deal. So there's a number of areas we're investing more.

But again, we're going to be disciplined and we'll let some things go and we have let some things go. So, I guess that really - we want to expand the content offering properly, but we want to do it in a disciplined fashion. So some things will come, some things will go. Hopefully, we're focused on the right tentpole exclusives, similar to what Howard Stern brings to the platform. And we'll be in a good position in terms of our content offering.

Bryan Kraft

Okay. And on podcasting, I think a lot of people are trying to, just try to frame how large or how material that could become as a business for you. So if there's any light that you could shed on that, that'd be great.

And also any color you could give on the cost structure for the podcasting business, as we think about that business growing how we should think about the cost side.

Sean Sullivan

Yes, so my assessment is it's roughly today a billion-dollar market opportunity in U.S. or thereabouts. That represents, what a fraction of what terrestrial radio is. So I think the opportunity today is small. I think the good news is it's growing quickly. It's something that the audience is demanding and share of ear is capturing more and more.

And I think with the Stitcher acquisition, we're well positioned to capture our share of it. I think as we just talked about programming and content investments to cultivate the talent and the investments we have today. Again, people like Kevin Hart or otherwise, where we can actually use our existing investments in content to monetize through podcasts, I think is a great opportunity for us to expand that market and the monetization within it.

So, all-in-all, that's what I think the revenue opportunity is. I think the cost structure to-date, given the nature of the deals, it's probably more of a challenging margin profile. But I think as part of an overall proposition for a consumer, it certainly makes sense and is a good piece of business for us. But those are my thoughts on podcasting.

Bryan Kraft

Okay, great. I want to ask you about the CRB Web-V decision that's expected by mid-April. We know from experience that royalties always go higher on these decisions. But how should we think about the risk to your EBITDA guidance from such an outcome?

Sean Sullivan

Yes, so I think we've taken a pragmatic view to it. I think the bid and the ask in terms of what we pay today versus what we are bidding and what they're asking, I think is well publicized. I think we've taken, like I said, a reasonable position in our guidance in terms of what the potential outcome will be. We certainly don't know what it will be. But I wanted to provide some guidance with what we thought was a reasonable expectation of what may occur.

As you know, people like me aren't in the business of issuing and then lowering guidance. So hopefully I've taken a pragmatic approach and taken a reasonable position. So the good news is, I guess we'll know the answer to this before April 15. So like I said, I think we've been sensible in terms of how we've communicated our expectation.

Bryan Kraft

Okay, great. And how should we think about capital allocation priorities under the new C-Suite leaders, Jennifer and yourself?

Sean Sullivan

Yes, I don't think you're going to see, Bryan, a big change. I think the company has properly invested in the business, in terms of the key tenants of any capital allocation. I think we've made the proper investments in content, the proper investments in product and digital product in terms of automation and efficiency opportunities. So we'll continue to invest organically in the business. The company's done a fair bit of M&A, obviously smaller scale in 2020 than the beginning of 2019. So I think we'll look at opportunities to accelerate our position inorganically through M&A.

I think that after that our capital allocation is often guided and mostly guided by our EBITDA growth, our free cash flow on our leverage. So, I think we've been a strong allocator of capital in terms of share repurchases and dividends. That's been guided by like I said, the leverage and free cash flow. So you shouldn't see a real change in priorities. I think it's just an evolution in terms of what we're doing.

At the end of the day the pace of buybacks are strong in the fourth quarter continued strong into the beginning and early part of 2021. But, as I said, on the year-end call, I think that our full year cap allocation deployment will be guided by to a certain degree leverage EBITDA growth, and ultimately, what other opportunities for capital investment there are both through M&A or in the business itself.

So long story short, not much of a change in terms of what is historically been done.

Bryan Kraft

And let me ask you this, I understand that dividends and share repurchases are board level decisions. And I want to ask you, how liberty crossing 80% ownership in the future will impact that since that's a liberty position. But what's your perspective as a seasoned CFO on dividends versus buybacks, particularly in light of the decreasing public float?

Sean Sullivan

Yes, we all know liberty, I think has an appetite for dividends above 80%. I think Greg has talked about that and others. But as it relates to Jennifer and myself, we see great value in our share repurchase at these levels and these prices, given our bullish view of the opportunity that Sirius XM has. So we're very comfortable with the share repurchase. I think the repos haven't been limited by liquidity in the stock. So even whether it's shrinking float, I think we've been able to effectively execute the share repurchase program.

The future, when we cross 80 some point, in the future, we'll cross that bridge. I think we'll stay on the current path, in terms of what we've talked about, and how that'd be guided, and ultimately, the future decisions about it will be made by the board of - a great group of board of directors that will provide us insights in terms of how best to proceed from that point forward. So, I guess, stay tuned.

Bryan Kraft

Okay. And can you remind us what your target leverage ratio is? And any potential changes there?

Sean Sullivan

No, I think previously, before I got here was previously stated at four times, I don't have any intention to change that or otherwise. I think that historically, our practice speaks for itself. We've operated the low to mid threes. We think that that's a very sound leverage profile given the visibility and predictability of the business. Even at those levels, it gives us enormous flexibility, and financial opportunity to participate in things that may come our way.

So, all-in-all, again, low to mid 3s is where we're comfortable. I think that historically, people have been comfortable up to 4 times through M&A or otherwise with a deleveraging profile in the near to midterm. So, that's I think, for this business, being here four months feels right to me.

Bryan Kraft

Okay. I've got a couple of questions from the audience. So the first is, can you talk about how the ad market recovery continued into the first quarter and whether wish? And also secondly, any update on how churn has trended so far in the first quarter. So ad market recovering in the first quarter and any update on churn in the first quarter is the question?

Sean Sullivan

Yes. I think I mentioned this, Bryan, on the ad side. I think we've been encouraged through a couple of months. I think the demand and in for advertising and the recovery of the market continues to be encouraging. I think we're pleased with what we're seeing in the marketplace. I think there's still room on the Sirius XM broadcast side to get to pre-pandemic levels, but you know, I think the Pandora monetization, we obviously have the benefit of Stitcher for the first quarter too, so that'll be a favorable comp.

But, all-in-all the ad recovery it feels very positive to me. I think that's what I'm hearing from others market participants.

And on the churn side again, nothing materially different to report. We continue to be pleased with our churn rates exiting in what we see early 2021.

Bryan Kraft

Okay. Another audience question, what does management think about the pricing changes that Spotify is making?

Sean Sullivan

Again, I'm not going to comment. I mean, again, they make pricing decisions. I don't really have a comment on what competitors' actions are. I'll pass on that one.

Bryan Kraft

All right. Okay, that's really about it on the audience side. So if I don't know if you wanted to make any closing comments before we wrap up.

Sean Sullivan

Again, it's great to be with you, Bryan. I appreciate the opportunity, everybody's participation. I think 2021 is going to be an exciting year for the company. I think the investments we're making in some of the product and the content, I think is really going to really set us up well for years to come. So, I look forward to touching base again soon.

Bryan Kraft

Okay. Well, thanks very much for joining us today, Sean. It was nice to see you and enjoyed the conversation. And thanks to everyone in the audience who joined us today. Take care.

Sean Sullivan

Thank you. Be well.

Bryan Kraft

You too.