Radio's future can be even better than its past. Making Waves, the new book by Mark Ramsey, can help any broadcaster navigate a world of endless competition. An action plan for the future plus expert advice from Seth Godin, Douglas Rushkoff, Joe Jaffe, and many more. Read the Analysis: Howard Stern moving to SIRIUS Satellite Radio
(Full disclosure: SIRIUS Satellite Radio is a Mercury client)
For a long time I've been saying that entertainment, not music, is the key to subscriber growth for Satellite Radio.
For a long time I've been saying that hiring the "low-hanging fruit", the marginally known Radio talk types (that means you, Opie & Anthony), is a poor excuse for the kind of strategy required to make a big difference on the subscriber front.
For a long time I've been saying that Howard Stern is at the top of a very short list of nationally known personalities that have a high-passion, built in constituency.
Today, Howard Stern and SIRIUS Satellite Radio announced Howard will be moving off commercial radio and over to SIRIUS at the end of his current contract in a year-and-a-half.
SIRIUS is hiring the goose and hoping he lays golden eggs.
I have absolutely no doubt he will.
This is a sad day for terrestrial Radio. Howard's announcement means not only that Radio will be losing one of its notorious shining stars, it also represents a signal to up-and-coming and established talent: The grass is greener - and the creative freedom greater - in Satellite Radio. At a time when Radio has a tough enough time generating positive buzz - let alone positive momentum - this is a harsh body blow.
This is a happy day for right-wing religious fundamentalists who have long portrayed Howard Stern as Public Enemy #1 and have worked tirelessly to rid Stern's millions of fans of his presence.
This is the happiest day of all for SIRIUS. According to their site and their news release, they'll need to add one million subscribers to make this deal pay for itself.
Something tells me "one million" will be conservative.
Congratulations Howard! And thanks to the right wing extremists who are making the public airwaves safe from the kind of programming millions of listeners say they want to hear.
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Whoa! Sirius is finally getting serious about making headway into XM’s leadership position.
And according to reports, Sirius is paying $500 million over five years to make the Howard Stern satellite show happen. Reports also say that 80% (or $400 million) will go directly to pay the salaries for Howard and his staff.
It is amazing to note Sirius has around 600,000 subscribers today compared with the 12,000,000 listeners (not subscribers -- big difference) who listen to Stern. A bold move for Sirius and a visionary move for Stern.
Will Stern do for satellite radio what the Sopranos and Sex in the City did for HBO? (HBO’s subscriber base has benefited greatly from those wanting to watch the Sopranos and Sex in the City.)
I also read that Stern’s satellite show may include advertising … something satellite radio has used to differentiate itself from terrestrial radio. If anyone can get away with running ads on a per-per-listen basis it would be Howard Stern.
To say this is a wake-up call for terrestrial radio is an understatement.
Whoa! This is big news.
Posted by: johnmoore (from Brand Autopsy) | October 06, 2004 at 12:40 PM
Right you are, John.
It is an astonishing amount of money, isn't it? But it proves yet again the impact of the creative element on our ability to leverage our investment into positive financial results.
Posted by: Mark Ramsey | October 07, 2004 at 06:43 AM
It is interesting to note that Sirius stock jumped 15% on the day of the announcement and thus added $644,000,000 in value to the company.
Sure, Sirius is paying $500,000,000 for Howard Stern but they are already reaping the financial benefit.
Posted by: johnmoore (from Brand Autopsy) | October 07, 2004 at 09:50 AM
To correct an earlier comment, Stern has 8.0 million-ish listeners, not 12 million. As for Stern generating enough revenue for SIRIUS to pay for the costs, I don't think that's what management is going for. I believe they're using Stern much like they're using the NFL, as a loss leader. They're taking the same approach as Fox and DirecTv did when they signed up with the NFL. The brand name gave those fledgling networks quality brand name recognition that pays off years later. That's what SIRIUS is doing with Stern. Well, in my humble opinion at least.
Personally, I don't see how they hope to make $500 million back from Stern's show alone. Good move of course, the financial markets seem to think so. Also, another comment mentions the 15% jump in their stock price. Well, if you take a look at the preceeding month you'd see that SIRIUS had gained about 18% or so since early August. Or more precisely since their NFL announcement. Good things at SIRIUS; 5 years from now they'll be on top.
(I'm disappointed XM didn't do this as I like their programming better.)
Posted by: CobaltNova | October 07, 2004 at 02:35 PM
When broadband wireless is everywhere and Internet radio stations are as easy to receive (for free!) in your car or cellphone as terrestrial radio is today, then the only thing that will drive satellite subscriptions is unique content you can't get via countless Internet streams. Sirius has proven to have much much more foresight in this regard than XM.
Posted by: Jim Kerr | October 09, 2004 at 12:37 PM