Aug 1(Reuters) - SiriusXM posted a

lower-than-expected drop in subscribers who directly pay for its

satellite radio service, helped by steady demand for its content

that includes the Howard Stern show.

Decline in the key subscription segment narrowed

sequentially and from a year ago largely due to strong customer

retention, the company said.

"We still expect to see slightly better self-pay net adds

this year compared to last," CEO Jennifer Witz said.

The company's self-pay subscribers fell 100,000 in the

quarter ended June 30, compared with a decline of 132,000 a year

ago.

Analysts at Visible Alpha were estimating a loss of 153,140.

However, the company's second-quarter churn, which is the

rate of customers who stopped using its services, was 1.5% among

self-pay users, same as a year ago.

Paid promotional subscribers declined about 73,000, which

the company largely attributed to a shift towards unpaid trial

subscriptions by certain automakers.

SiriusXM's quarterly revenue of $2.18 billion came in below

LSEG estimates of $2.20 billion.

However, its advertising revenue of $443 million was above

analysts' average expectation of $331.2 million.

Net income for the quarter stood at $316 million, compared

with $310 million a year ago.

Free cash flow rose to $343 million from $323 million a year

ago.

The company expects to close the announced transaction with

Liberty Media after the market closes on Sept 9, finance chief

Tom Barry said.