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Howard Stern Now King Of Just One Media

Posted by Abe Sauer on December 9, 2009 01:16 PM

Less than five years after declaring his move to satellite radio a "Revolution," Howard Stern just said, "I don't think I'm going to be re-signing." My how things change. The radio personality whose brand was the epitome of lacking humility looks to be ready for some humble pie.

It is difficult to express just how disastrous Stern's move to SIRIUS satellite radio was to the Stern brand. Before the move, Stern was a regular fixture in the national consciousness, debating important matters, riling government communications officials and generally considered a hero by millions in his listening audience.

And then, at the height of his powers, Stern took his brand onto pay-service satellite radio and he's hardly been heard from since. It is easy now to see that the "censorship" Stern pounded his head against, and which the move to satellite was meant to remove, was actually an integral part of the Howard Stern brand. That is to say, part of what made Howard Stern Howard Stern was his constant battle with censors.

SIRIUS, now XM-SIRIUS, invested heavily in the Howard Stern brand, confident in the promise that his legions of fans would pay to hear the King of All Media on satellite radio. It didn't happen. While Stern was a more successful draw than other satellite radio personalities, he ostensibly was not worth the millions he received in payment. What's more, the ferocious marketing of Stern may have ended up hurting the rest of SIRIUS' lineup, as the promotion of many specialty brands were sacrificed to focus attention on Stern.

Of course Stern's announcement a year from his contract renewal is all about negotiations. He'll push, manipulate. XM-SIRIUS will retaliate. High-minded idealism about programming will be front and center, but in reality the posturing is all about money, which, unfortunately, now defines the Howard Stern brand.

Comments

Jay Groccia United States says:

Interesting post Abe, but the absence of any financial evidence is curious, notably you don't mention subscriber numbers pre-Stern and present-day numbers.

Here's a very interesting chart showing subscriber data by quarter from September 2001 through September 2007:
siriusbuzz.com/...s-passes-8000000-subscribers.php

December 2005 Sirius had 3.3M subscribers and XM had 5.9M. Stern began broadcasting on Sirius in January of 2006.

By the end of Q4 2007 Sirius grew its subscriber base to 7.6M. So in 7 fiscal quarters Stern ADDED 4.3M subscribers. At $12.99/month that's nearly $56M/month or $607M/year - more than the entire 5 year payout to the Stern organization.

With that in mind, how exactly does "was not worth the millions he received in payment." hold water?

Today SiriusXM boasts 18.4 million subscribers.
investor.sirius.com/releasedetail.cfm

Satellite radio has continued to grow despite the nearly complete melt-down of the auto industry over the past two years (a major contributor to satellite radio growth).

I'm no Wall St analyst, banker, or stock trader. In fact I'm just a guy that enjoys listening to commercial-free music and talk radio in my car that doesn't fade when I drive around and gladly pay over $20/month for two radio subscriptions. Oh, yeah. Stern's show has reached a whole new level now that he's on satellite. The 10-20 minute commercial break is as distant a memory as Jackie Martlings' hyena laugh underpinning the show.

December 10, 2009 10:39 PM #

A Sauer United States says:

Assuming that Stern was responsible for every single new subscriber is assuming a lot considering SIRIUS at that time was also shelling tons of money for exclusive rights to the NFL and a ton of those subs were added through in-car auto purchases where the service was given away for free for the first year.

And satellite radio does continue to grow and I think Stern was worth it to Stern fans (and you make a good point about reaching a new audience).  But the simple math of multiplying the $13 a month and the 19 million doesn't hold (if it did Sirius shares wouldn't be trading for 11 cents and In Aug they posted a quarterly loss).

December 11, 2009 11:39 AM #

Adam Zand United States says:

I'd kill my brand for $50M. Leaving CBS and censors allowed Howard Stern to do the show he always wanted. He got married, his kids are growing up, he has lots of $, and if necessary he can think back on how he was King of All Media - his brand seems fine to e

December 11, 2009 10:54 AM #

Jay Groccia United States says:

If you read their 3rd quarter report it says they had revenue of $630,000,000 Q3 2009. The report actually states, "Monthly average revenue per subscriber (ARPU) was $10.87 in the third quarter 2009, up 3% from $10.51 in the third quarter 2008."

SiriusXM is a media outlet that's actually growing. Take a look at the CBS radio division since Howard left. It's in a free-fall. Remember - when Howard was syndicated trough CBS Radio sales departments made advertisers purchase time throughout the day if they wanted spots on Stern - a sore spot for Stern because he never saw any of that revenue.

December 11, 2009 12:06 PM #

A Sauer United States says:

No doubt CBS was wrecked after Stern left. And Sirius XM is growing (fater 2 quarters of no growth). But slower than ever. Stern isn't going to adding millions more subscribers anymore (i.e. most everyone who followed Stern to satellite is there now). Re: Stern and Sirius, what I was really talking about what the promise of a "revolution" (Stern's words) that would completely change radio and become a major media force. That hasn't happened and it's not going to happen in satellite radio's current form.

December 11, 2009 12:30 PM #

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