HOWARD STERN SHOW NEWS
Here's an article about Howard Stern going to satellite radio.
Stern's Move to Satellite Radio Is Critical to Sirius and Infinity
November 9, 2005
My friend Rich is a longtime Howard Stern listener. But Rich, a Los Angeles-based television producer, isn't going to follow Mr. Stern to Sirius Satellite Radio Inc. when he changes homes next year. "As much as I like Stern, I can't see myself paying for radio," Rich says, adding that while he expects that "those are words I'm going to eat…right now between the stations already out there and CDs, I'm covered."
Leila, his neighbor and a Howard Stern fanatic herself, is another story: She and her husband have already bought not one but two Sirius satellite radios for their cars. "We're in for the ride," she says, adding that they will likely get a third Sirius radio for their house.
There you have it. Two hardcore Howard Stern Show fans going in opposite directions, which is what makes it so difficult to predict what will happen when radio's biggest personality takes his raunchy act to satellite on January 2. To say Sirius is taking a huge risk would be an understatement -- it took a five-year, $500 million deal to land Mr. Stern. The hope is that Mr. Stern can bring in a big chunk of the roughly six million daily listeners he has now and elevate satellite radio from the fringe to the mainstream.
Mr. Stern has certainly been doing his part to get the word out: Since signing his deal with Sirius last year, he has talked up the service practically on a daily basis. On Monday, Mr. Stern's bosses at Viacom Inc.'s Infinity Broadcasting radio unit finally reached their breaking point, slapping him with a one-day suspension, apparently because he was babbling too much about Sirius.
When it struck its deal with Howard Stern, Sirius said it would make back its costs if the shock jock brought in one million new subscribers over the life of his contract. At the time Sirius had about 600,000 subscribers; now it has almost 2.2 million and expects to top three million by year's end. But a Sirius spokesman had no comment on whether the Stern deal was profitable, adding that the company won't say how much of its growth can be attributed to Mr. Stern's impending arrival. (Sirius also has other expensive programming, including deals with the NFL, NASCAR and Martha Stewart.)
Stern loyalists who subscribe to Sirius's service (a monthly subscription is $12.95) may be annoyed to discover the show will still have commercials. On the other hand, Sirius has said the show will have fewer ads than Mr. Stern's current broadcast- today, some fans wait for one of the show's long commercial breaks to end before beginning their morning commutes so they don't miss any of the Playboy Playmates. But who knows if the number of ads will stay the same? Sirius's ad revenue is on the rise, jumping to $1.5 million in third quarter of this year from $250,000 in the same period a year ago. Of Sirius's roughly 125 channels, a little more than half are commercial-free -- primarily the all-music channels.
Sirius isn't the only one whose fortunes could turn because of Mr. Stern. Infinity, Mr. Stern's home for the past 20 years, needs to replace the $100 million in annual advertising revenue brought in by his show. Besides subtracting 5% of Infinity's total revenue, Mr. Stern's loss could have other ramifications for the slumping radio industry: If Mr. Stern thrives on satellite radio, other radio personalities could follow. And while Infinity is just a small part of Viacom, its financial performance will soon be magnified: Infinity will be crucial to a downsized CBS Corp. after Viacom splits into two separate companies later this year. And what if Stern fans who don't follow him to satellite opt for CDs or iPods over broadcast radio?
Infinity acknowledges it will take a hit when Howard Stern signs off on December 16. His morning show is currently carried on 27 Infinity stations and 35 stations overall. (Last year, he was on 46 stations, but many affiliates have dropped him early, either in anticipation of his departure or for fear of indecency fines from the Federal Communications Commission.) Joel Hollander, Infinity's chief executive, says the company "will move on without Howard Stern." To replace him, Mr. Hollander has wisely decided not to go with just one personality, choosing instead to try a variety of hosts and formats. Infinity's biggest gamble is tapping one-time Van Halen singer David Lee Roth as Mr. Stern's replacement in seven markets, including New York. Veteran cable and radio personality Adam Carolla will succeed Mr. Stern in Los Angeles and five other cities.
The new personalities won't command anything close to Howard Stern's annual salary of about $25 million, but whatever savings there are in paychecks will likely be used on promotion. One potential plus for Infinity is that if any of these personalities builds a following and can be syndicated, the radio giant will get most of the bucks: Mr. Stern's show was syndicated by the radio star and his agent Monica Leigh, with the majority of the money flowing to them.
Howard will also face challenges adjusting to his new anything-goes environment. While he's mused on the air about the new freedoms he'll soon have, not all of his current fans tune in for the scatological humor or the obsession with strippers and Vivid Girls; they prefer Howard Stern's take on the day-to-day hassles of life, family, employees and employers. Since his new set will include a pole for strippers, it seems safe to say that at least initially, the radio personality will spend lots of time taking advantage of a no-rules world. But if he overdoes it, he may alienate part of his audience. "He's going to go over the line and he'll find out what people want and don't want," says Leila.
RETURN TO THE HOWARD STERN SHOW FAN CLUB
|