It didn't take long for Sirius XM Holdings (NASDAQ:SIRI) to start leveraging its Pandora (NYSE:P) acquisition. Less than a week after closing on its purchase of the streaming-music pioneer in a roughly $3 billion deal, Sirius XM sent out an email offer to its satellite-radio subscribers for a free 14-day trial to Pandora's premium platform.

Free trials for Pandora Premium are readily available for 30 days, and in some promotional cases longer, but all of those plans require listeners to offer their payment information. If they don't cancel at the end of the trial, they automatically become paying customers. The Sirius XM-fueled promo is far kinder than that. Sirius XM subscribers don't have to offer credit card information, and the plan checks down to the free ad-supported Pandora platform if they don't do anything. Pandora will only start charging Sirius XM subscribers who elect to continue with Pandora Premium after the two-week freebie. 

Check out the latest Sirius XM earnings call transcript.

A Pandora sponsored concert event.

Image source: Pandora.

It's all about volume

This is a smart move by Sirius XM. The vast majority of its more than 34 million subscribers will dismiss the email offer that expires on Feb. 19, but it's a win-win for Sirius XM for those who do decide to kick Pandora Premium's tires for the next two weeks. Only a slim percentage of those going for the trial may convert to paying Pandora users, but all of them will be exposed to the streaming platform -- and many should stick to at least the ad-supported free version once they've already downloaded the app. 

Reaching out to the email list of its existing Sirius XM subscribers is cheap. The gains will be incremental. This is also probably just the first stab at cross-selling platforms. It may not be long before a bundled service becomes available. 

Pandora's blind spot has been getting users to pay up, unlike its two larger streaming-music rivals that have feasted on premium signups. Just 10% of Pandora's active users are paying subscribers. Hooking up with Sirius XM -- the satellite-radio monopoly for which everyone's paying or about to start paying -- places Pandora in front of the perfect audience of well-to-do radio buffs who don't have a problem with paying for audio entertainment. 

The acquisition was great for Sirius XM. It's giving up 8% of its shares for a company that will account for a fifth of its revenue. It's a different story on the bottom line, where Pandora's red ink will initially eat into Sirius XM's bountiful profitability, but give that dynamic some time to work itself out. Pandora under Sirius XM's watch will turn profitable sooner than it would have on its own. This is a smart deal that will get smarter with every step Sirius XM takes in blending the two user bases.

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