A woman uses the BYD Karaoke feature inside the Song Pro, a hybrid-electric SUV by Chinese automaker BYD, at an event in Mexico City, Mexico, in August 2024.Toya Sarno Jordan/Reuters
Eric Boyko has seen the future and it involves everyone belting out their favourite song in the cozy confines of the family automobile, microphone in hand and lyrics at the ready. He’s only too happy to provide the tunes and tools.
Mr. Boyko is the hyper-energetic, fair-haired founder and chief executive of Stingray Group Inc. RAY-A-T, the Montreal media company perhaps best known as the supplier of programmed music and ambiance channels in the upper reaches of your digital TV guide. Stingray also happens to be Canada’s biggest radio station operator, becoming top gun after Bell Media sold 45 of its former 103 regional stations in a process announced last year.
But it’s the world’s auto assembly lines that have Mr. Boyko dreaming big these days. More precisely, the possibility of supplying many of the 90-some million passenger vehicles built worldwide each year with an entertainment experience no one realized they pined for: karaoke.
“Karaoke will be in every car in the world,” Mr. Boyko said without a hint of hyperbole in an interview. “Everybody wants it. It makes people feel that their car is like when we were kids and we would all sing along, you know?”
Ten years after Mr. Boyko took Stingray public in an initial public offering that was several times oversubscribed, the outspoken CEO continues to lead the company with the same DNA it’s always had: a curator of licensed music for the masses. The way it delivers that music, however, has changed dramatically. Stingray has transformed its subscription model for cable companies to an ad-supported strategy that’s pumping out tunes on cellphones and TVs, in retail stores, and now, in cars.
The shift started years ago, when Mr. Boyko and his leadership team took stock of the steady decline of conventional TV as Canadians moved in increasing numbers to streaming services such as Netflix and Disney+. The Convergence Research Group now forecasts that by the end of next year, half of all Canadian households won’t have a traditional TV subscription.
Stingray had to pivot quickly and it did. The company was able to repurpose its music and video for the manufacturers of televisions themselves. It now supplies content that comes standard on new televisions made by Samsung, Vizio and LG – a business delivering free streaming content to viewers that’s monetized through advertisements.
Manufacturers sell ads on Stingray channels and the revenue is then shared with Stingray. For Vizio, anything it can’t sell goes to Stingray, which backfills with its own ad sales network. That single sales angle is yielding an annual revenue run rate of $18-million, which Stingray expects will more than double over the next few quarters.
A BYD Atto 3 car is parked in the BYD store in Budapester Strasse and has a karaoke system as an optional extra.Jens Kalaene/Reuters
The company took aim at the retail market in much the same way, and now provides retailers ranging from CVS pharmacies in the U.S. to Loblaws and Dollarama in Canada with programmed music for their stores, supported by ads.
In the U.S., Stingray sells significant advertising to pharmaceutical companies, while in Canada, advertisers include paper towel and sandwich bag manufacturers, as well as car makers. In sum, said Mr. Boyko, the background entertainment that was once a cost line item for big retailers has turned into a money-maker.
“I would never have thought we’d be in advertising” to this extent, Mr. Boyko said. “But right now, that was the best decision we made because that’s the growth we’re getting... It’s a very deep lake.”
It’s the automobile opportunity, however, that has the CEO really wide-eyed. Stingray already supplies cabin karaoke systems for U.S. electric car pioneer Tesla, as well as Ford, Audi, and China’s BYD – it expects to generate roughly $10-million in sales from that business this year.
Now in talks with other manufacturers, Mr. Boyko said his vision is to be the in-car entertainment provider for as many vehicle makers as possible, offering not only karaoke, but also Stingray’s stable of curated playlists, as well as radio and podcasts. He said the company will soon announce three or four deals in this direction.
“I think that we are well-positioned to become the audio player in every car in the world,” Mr. Boyko said – a surprisingly brash statement that would entail dislodging industry stalwarts such as SiriusXM, which he acknowledges won’t cede market share without a fight. He said if Stingray keeps signing deals, it will be a 15-year growth stream for the company.
Last week, Stingray took a step toward cementing its karaoke expertise with the acquisition of the Singing Machine Company, a leading maker of karaoke mics and machines. Pairing the microphones with Stingray’s vast catalogue of karaoke music and score-your-singing software makes the overall offering that much more attractive, Mr. Boyko said, especially because the mics will only work with Stingray’s application.
If you buy a BYD Denza model today, you’ll find two microphones with pitch-correction technology in a case under the armrests, said Mathieu Peloquin, senior vice-president of marketing and communications at Stingray. For car dealers in Latin America in particular, the karaoke package is a big selling point that helps sway customers in showrooms, he said. “It’s crazy.”
Mr. Boyko, whose own karaoke go-tos are Elton John’s Your Song and Joe Dassin’s hit L’été Indien, isn’t happy with the company’s valuation – the stock trades at roughly seven times earnings – but investors have pushed up the shares about 50 per cent over the past 12 months. Net income for the last fiscal year was $36-million on revenue of $381-million.
“Overall, we remain impressed by the company’s ability to consistently unlock new growth and profitability from existing assets,” Desjardins Securities analyst Jérome Dubreuil said in an Aug. 6 research note. He rates the stock a “buy” with a 12-month target of $13.50.