Pandora Vs Sirius XM: Who Spends More On Product Development & Why

• In absolute terms, Pandora and Sirius XM last year spent roughly the same amount on product development.  However, we project a significant increase in these expenses for Pandora to be significantly higher than for Sirius XM going forward.
• In fact, by next year, Pandora is expected to spend 16% more than Sirius XM on product development

• Sirius XM spends a much smaller proportion of its revenues on product development than Pandora does
• In fact, this proportion is expected to decline over the next two years for Sirius XM but increase for Pandora

• Pandora spends a bigger portion of its expenses on product development than Sirius XM does and it is expected to increase in 2014-2017 time frame as opposed to the trend for Sirius XM

The above findings make sense because Pandora needs a better platform to bring in new users and convince the existing ones to subscribe to its services. Therefore, it has been increasing its spending on product development aggressively. In fact, last year, the company acquired Rdio for its intellectual property with the idea of bolstering its listening platform.

Have more questions about Sirius XM? See the links below:

• What’s Sirius XM’s Revenue & Earnings Breakdown In Terms Of Revenue Sources?
• What’s Sirius XM Fundamental Value Based On Expected 2016 Results?
• How Has Sirius XM’s Revenue Composition Changed In The Last Five Years?
• By What Percentage Can Sirius XM’s Revenues Grow Over The Next Three Years?
• By How Much Can Sirius XM’s Subscription Gross Margins Expand By 2020?
• How Much Revenues Can New Sirius XM Subscribers Add By 2020?

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