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Forget Pandora! This worries SiriusXM CEO more ...

The business model of Internet streaming music service Pandora cannot work without a "lot more advertising," SiriusXM CEO Jim Meyer told CNBC on Tuesday.

"That plays to our strength," he added, "because our music stations will remain commercial free forever."

SiriusXM has about 25.1 million subscribers, which according to Seeking Alpha compares to roughly 6 million paid users for Spotify and about 2.5 million paying subscribers for Pandora.

Meyer said on "Squawk Box" that terrestrial radio is still "the biggest gorilla in the room" with about $15 billion a year in revenue, compared with SiriusXM's projected $4 billion in sales next year.

"The competition for me has always been free" radio, he continued. "We're not interested in customers who don't want to pay."

In the same interview, Greg Maffei—the CEO of Liberty Media, which owns a majority stake in SiriusXM—talked about one of the satellite radio service's crown jewels: Howard Stern.

"Howard is more relevant than ever."

Meyer seconded that, saying Stern's other job as a judge on NBC's "America's Got Talent" has broadened the appeal of the shock jock.

Besides serving its subscribers, SiriusXM's relationship with automakers is important, considering a main revenue stream has been the inclusion of satellite radios in new cars, trucks and SUVs.

"We're in 70 percent of all new cars built," Meyer reported. "At the end of the third quarter, we have 57 million [vehicles] out there that have our technology incorporated. And about mid-30s of that are not active."

But he said that part of the business is evolving, as subscribers sell their cars. "We're now getting two bites at the apple," Meyer said, because the company can also sell the purchaser of that used car satellite radio service.

On Monday, SiriusXM said it has successfully placed in orbit its newest satellite and declared it ready for service. Meyer told CNBC, "We probably have a runway of four to six years where we really don't have any satellite capital expenditures."

The new satellite will help deliver more reliable service to subscribers.

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.

Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and NBC. In addition, CNBC Radio has a channel on SiriusXM.

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