The Howard Stern countdown has officially begun. Nah, not for the day the FCC goes out of business or Howard "reinvents all media." Rather, the clock is ticking on the time he has left on fee-based satellite radio. I give it a year. My guess is that by next spring, the Stern Gang will be celebrating their hero's god-like, triumphant return to the radio airwaves - and to the mass audience he left behind.
That's because the big Stern shift was short. Like one big quarter, and two small ones. And it's already over. Painfully over. So over that Sirius is now paying $150 bucks to acquire each subscriber, an increase over the pre-Stern days. So over that the blowback on the two extant satellite radio providers has already started in stock prices and executive resignations - because it's beginning to look like these bloated behemoths will never turn a dime of profit.
Both Fred Wilson and Jeff Jarvis criticize CBS for its suit against Stern and Sirius on their blogs today - Fred because he thinks it's bad business to look back, and Jeff because, well, he's got the typical Howard blindspot of his walking demographic. I think both of 'em are wrong.
Fred's wrong because this lawsuit (in which CBS charges breach of contract, fraud and other claims related to Stern's move to Sirius earlier this year) is about the future, not the past. Someday, Stern will return to free radio and CBS will be damned if they don't position themselves with some leverage to make it happen. This suit is about leverage. Howard is a big star and there are precious few mega-networks out there for his like to sign with.
And Jeff's wrong because Howard Stern is most assuredly not the character he portrays on his show. He is not a rebel when it comes to business. He's a brilliant marketer, self-promoter, and a follower of both cash and trends. He is emblematic of nothing except for his lucrative shtick, and he is powerful in financial terms because of the demographic he appeals to - a demographic that buys a lot of stuff, but that is getting older by minute. The idea that Howard Stern represents anything but the biggest of media, the cash cow for those cigar-chewing boys down the hall in ad sales, is patently ludicrous. He is the media gatekeeper's orgasmic sales dream, not the open media indie rebel with a cause.
And clearly, he's topped out.
Over at the Motley Fool, satellite defender Rick Aristotle Munarriz argues against the newer, more open forms of audio content - and for the big investments in the sky over planet Earth:
XM and Sirius own the satellite radio spectrum. What are the alternatives? Terrestrial radio? Give me a break. One sample of the commercial-free quality of coast-to-coast digital music coverage and you'll never go back to ad-laden, repetitive drivel on traditional radio. Even as companies like Clear Channel try to roll out high-definition radio and narrowcasting initiatives, it will be perpetually doomed to subsidizing the airwaves with burdensome advertising.
Internet radio? It's bold in spunk and spirit but mild in streaming quality and portability. iPods and other digital music players? Nice, sure, but they are simply whetting the appetite for the new music discovery process and revival of audio entertainment that plays right into the satrad billfold.
Let's put that argument in perspective: wrong and wrong, at least according to the very company he's defending. First of all, Sirius is rushing to add advertising revenue to Stern's programming, thereby tossing the ad-free value proposition out the window. Secondly, Sirius is also looking into putting Stern online - possibly in paid streams or podcasts and through feeds.
Say this slowly out loud and see if it makes good business sense: Sirius spent a billion to fly some equipment into orbit and another half billion on Stern, and now it's banking on paid RSS feeds? Houston, we have a problem.
And let me say this - XM cut a far better deal with Oprah than Sirius did with Stern - a tenth of the up-front cost and Oprah gets to keep her day job and promote her satellite gig. Let me also add that HD radio's drive for users is just beginning - at far less cost than space-junk - and that will eat away at the core of people who might go satellite with their radios. Finally, the Internet: there are only so many hours folks have to spend on media, and with radio being primarily a background medium (you do other stuff while you listen) the competition is rough and getting rougher. With last.fm and iTunes and a handful of podcasts - plus WFAN in the shower - what more does a fellow need?
The movement in media is away from old-school, fire that rocket, we-own-the-pipes, shaddup-and-listen-doofus plays like Howard Stern and satellite radio. It's toward media controlled more and more by consumers - in some cases, created, edited, mashed up and distributed by consumers. That makes Howard Stern the last big radio star ever. And it means he'll be doing his last big radio shows over the airwaves. The countdown has started.
from Amazon.
