US satellite radio - defection to satellite radio may elevate medium
By Diane Toroian Keaggy
St. Louis Post-Dispatch
Shock jock Howard Stern fancies himself the "king of all media,' emphasis on
the word "all.' Already a star on the FM dial, best-seller list, silver
screen and television, Stern announced Wednesday he's taking his act to
satellite radio in 2006. The move will free Stern to crack dirty jokes and
utter obscenities without fear of reprisal from his nemesis, the Federal
But more important, observers say, Stern's defection from terrestrial radio
may push satellite radio from obscurity to the mainstream.
"After two years of being 'the other,' satellite radio is developing its own
content,' said Sean Ross of Edison Media Research, which conducts surveys
for a number of media outlets. "This certainly could drive traffic to
Two competing companies Sirius Satellite Radio based in New York and XM
Satellite Radio based in Washington each program more than 100 stations of
music, talk and sports, much of it commercial free. XM is the dominant of
the two companies, claiming about 2.5 million subscribers. Sirius has
600,000. Both offer coast-to-coast coverage, so a trucker can start his day
in Montana and travel to the Midwest without switching stations or losing
But this technology comes at a cost. XM charges listeners a $10-a-month
subscription fee; Sirius costs $13 a month. Most electronic stores can equip
a car with a satellite receiver and antenna for $150; a Sirius-ready boom
box costs about $100. Neither company has developed a small, Walkman-like
In terms of content, each company boasts its own unique programs. XM
features NASCAR broadcasts, MTV radio and seven country stations. Sirius
hosts NFL football, World Radio Network and 15 rock stations. Both air the
Weather Channel, BBC World Service, C-SPAN Radio, CNN and Bloomberg Radio.
Until Wednesday, XM had the upper hand in the high-profile- host category.
Last week, it debuted "The Bob Edwards Show' starring the revered, former
National Public Radio personality. XM also signed Opie and Anthony, the
one-time syndicated shock jocks who got booted off the air after they
encouraged a couple to have sex in St. Patrick's Cathedral.
Though Edwards and Opie and Anthony certainly enjoy loyal followings, their
popularity pales compared to Stern's. Aired in 46 markets, Stern's show
dominates morning ratings among young men. In St. Louis, one out of five men
ages 18 to 34 tuned into morning radio listen to Stern. John Beck, the Emmis
Communications exec who brought Stern to St. Louis six years ago, says the
show has boosted revenue and ratings on local affiliate KPNT (105.7 FM). He
recognizes that fans love Stern. But do they adore him enough to pay for
"He has 126,000 listeners here. How many people are obsessed enough to put
in the equipment and spend like $150 a year to hear him on their 20-minute
commute to work?' asked Beck. "We in the media often have a false sense of
our importance. We think, 'What will these people do if we leave?' Well,
they move on.'
Sirius Satellite Radio hopes that 1 million of Stern's national following of
12 million fans need their daily fix of Stern's celebrity interviews,
political jabs and off-color satire. That's how many new subscribers the
company needs to cover the cost of its five-year, $500 million deal with
Jenny Miller of the Consumer Electronics Association, a leading trade
organization, forecasts Sirius should meet that goal. Even before Stern's
announcement, the association's 2004 market-potential study estimated Sirius
and XM would attract 5.3 million new subscribers in the next year. Miller
said Stern's move would boost consumer awareness not only among his fans,
but among average folks who still may be a little cloudy about the medium.
"I think this will get people curious,' said Miller. "With any new
technology, content is what drives adoption. After all, why would you buy
something if it doesn't offer you something new. This shows satellite has
something new to offer.'
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