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October 07, 2004
Thursday, October 6, 2004. Stern
Thursday, October 6, 2004. Stern News for Infinity.When Howard Stern announced on the air that he would be moving to Sirius satellite radio in 2006, when his current contract with Infinity radio is up in 15 months, you could almost hear the groans at Infinity, Viacom, and the entire radio industry.
According to the Wall Street Journal, the obnoxious Stern signed a five-year $500 million deal with Sirius, which hopes that the signing of Stern will add a million subscribers to its current subscriber base of 600,000. Subscribers apy $12.95 a month for a variety of commercial-free music, talk , sports, and entertainment channels. When Sirius signed a deal to carry NFL games earlier this year, that move was not touted in the press nearly as much as the Stern signing was. Sirius's signing of Howard Stern made the front pages of the New York Times, the Wall Street Journal, and USA Today, which was much more prominent play than Sirius's NFL deal got.
Both Wall Street Journal and the USA Today articles were better than the Times's article because both had more financial details. The USA Today piece asked the best question about the deal: "Did Sirius pay too much for Stern?" Investors didn't think so as stock in Sirius closed up almost 16% on the Nasdaq. Some analysts speculated that Sirius did pay too much and would never recoup its $100 million a year for Stern. I think the analysts are right, Sirius won't get its money back in subscriber revenue, even if they charge a premium for Stern, which they probably will (Opie and Anthony on XM Satellite Radio is $1.99 a month extra, but XM charges only $9.95 a month versus Sirius's $12.95 a month). But the Stern deal might be worth it to Sirius for the publicity. I mean how often can you get front-page stories on the three largest circulation newspapers in country? To say nothing about the publicity the move received on radio and television and the magazine covers that are sure to come.
In my next blog, I'll write more in depth about the financial, audience level, and social implications of Stern's move to Sirius. But in the meantime the move, as much as I hate to admit it, does make Stern the "King of All Media" as he has so often and so modestly proclaimed for years, to Don Imus's disgust.
Posted by Charles Warner at October 7, 2004 09:38 AM
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