If Howard Stern Leaves, Will Sirius XM Survive?

Discussion in 'The Howard Stern Show' started by Nemo, Jan 15, 2014.

  1. Nemo

    Nemo Beer Can Thick Gold

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    http://www.dailyfinance.com/2014/01/15/if-howard-stern-leaves-will-sirius-xm-survive/


    by Daniel Kline, The Motley Fool Jan 15th 2014 2:01PM
    Updated Jan 15th 2014 2:02PM


    If Howard Stern follows through with his threats to leave or retire when his current Sirius XM contract expires, his departure would be a crippling blow to the company. Even if he decides to sign on for a few more years, the extremely popular host just turned 60 and has often said he won't be like Don Imus or Larry King, clutching a microphone until he is dragged away from it. So, whether it's 2015 or a few years later, Sirius XM has a huge problem on its hands.

    When Stern joined the then Sirius Satellite Radio in January 2006, the struggling company had 600,000 subscribers. Now, having merged with rival XM, the combined Sirius XM, in its fourth-quarter financials, claimed 25.56 million subscribers.

    And though the company does not release ratings for any individual channel, a large amount of its paying customers listen to Stern primarily, if not exclusively. In fact, back when Stern was making news about leaving rather than take a pay cut from his rumored $100 million a year salary, Forbes reported that 60% of Sirius' audience listened exclusively to the controversial talker.

    Even if that number was an overestimate or has fallen as Sirius XM has grown its subscriber base, the potential subscriber loss from a Stern departure could mean a stunning business hit. With a mid-priced Sirius XM subscription costing $14.99 a month, a loss of 1 million subscribers would mean $14.99 million a month or $178.8 million a year -- a huge loss even when you subtract Stern's salary.

    If only a million subscribers leave with Stern, the blow is manageable. If the number were considerably higher -- and there are strong reasons to expect it would be -- the news could destabilize the company. Unlike in television, where the next hit is always potentially one pilot season away, there are no short-term solutions in radio.

    Stern's current deal expires in December 2015 and, if you believe the radio hosts persistent on-air rants, he could go to a pure Internet play or simply retire. When the host took his show to Sirius from terrestrial radio, the stations he was on tried a number of alternatives, including David Lee Roth, Adam Carolla, and later, younger Stern knockoffs Opie and Anthony. None of those shows succeeded. The David Lee Roth Show earned a market share of 1.8% in January 2006, down from the 7.9% Stern attracted the prior month. Today, Roth is back fronting Van Halen, Carolla hosts a successful podcast, and Opie and Anthony have a dramatically lower profile than Stern's channel on Sirius XM.

    The flagship terrestrial stations that aired Stern's show not only struggled to replace him, many of them had to change formats, in no small part due to his departure. Stern's flagship, New York's K-Rock even had to dump its rock format and move to Top 40. In Boston, Stern's station WBCN, one of the most iconic rock stations in the country, simply went away.

    The New York Daily News reported in 2009 that when he left for satellite in 2006, CBS Radio's then-CEO Joel Hollander estimated Stern generated an astonishing 10% of all CBS Radio revenue. According to the same Daily News article, that number was even higher at K-Rock -- the last couple of years Stern was there, the station collected more than $50 million in ad revenue, and finance people said about 75% was from Stern.

    Will people cancel?

    One of Sirius' strongest attributes is that it has had a very low monthly churn -- losing just 1.9% of subscribers per month in 2012, the last full year for which results are available. That number is especially impressive when you consider it takes into account people who get a free subscription with a new vehicle and must choose to stay a customer and pay after the trial period.

    Still, with so many of its customers fans of Stern more than of Sirius XM, you have to imagine there will be a large migration if he leaves. That number would likely be much greater if Stern decided to stay on the air, but move his show elsewhere. Both Yahoo and Apple's iTunes were rumored destinations when his contract was last up. It's also possible that Stern, who has famously butted head with his bosses at pretty much every stop on his career, will simply partner with a company on the technical side and take his show to the Internet under his own flag.

    Alternative hosts

    Sirius has thrown money at a number of celebrities including Oprah Winfrey, who Stern famously ranted about as she received $18 million a year (according to The Hollywood Reporter) for a deal where she appeared on the channel in an original show for just half an hour a week. Martha Stewart also got millions for her now defunct channel. And channels branded to Maxim and Cosmopolitan magazines have come and gone.

    Realistically, as was proven when Stern left terrestrial radio, there is no one person or even group of hosts who can fill his seat. The best bet for Sirius, if Stern were to retire, would likely be to keep his two channels -- Howard 100 and Howard 101 -- on the air with a mix of repeats (the company will own more than 30 years of shows by 2015) and new programs featuring various Stern sidekicks.

    If Stern stays on the air, it's unlikely his audience would stick around for the Gary "Baba Booey" Dell'Abate show or even for sidekick Robin Quivers, and it's unlikely any of Stern's main cast would ever desert their boss.

    But if Stern hangs up his mic, perhaps Sirius XM could entice him into an ongoing relationship by employing his crew (whose post-show futures he has often worried about on the air). Howard 100 and Howard 101 without new Stern shows would not be the same, but having the channels with new programs from familiar people in the Stern universe may very well stop the subscriber bleeding.

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    The article If Howard Stern Leaves, Will Sirius XM Survive? originally appeared on Fool.com.
    Fool contributor Daniel Kline is long Sirius XM. The Motley Fool recommends Apple and Yahoo! The Motley Fool owns shares of Apple and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

    :facepalm:
     
  2. whatsit

    whatsit Dawg Lover VIP

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    It comes with most cars now.
     
  3. whatsit

    whatsit Dawg Lover VIP

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    I would not listen without Howard. Pandora is free. It's just as good.
     
  4. Nemo

    Nemo Beer Can Thick Gold

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    Daniel B. Kline
    [​IMG]http://my.fool.com/profile/Dankline/info.aspx

    Daniel B. Kline is an accomplished writer and editor who has work for the Microsoft Windows 8 Finance app and The Boston Globe, where he wrote for the paper and ran the Boston.com business desk. He also made regular appearances on Radio BDC and hosted the Boston.com live blog during the Boston Marathon bombing coverage. His latest book "Worst Ideas Ever" (Skyhorse) can be purchased at bookstores everywhere. In addition to his financial writing, Kline wrote a syndicated opinion column that appeared in hundreds of newspapers. He lives in Connecticut with his wife, Celine, son, Joshua, and cats Caroline and Cookiepuss.

    :bigthink
     
  5. whatsit

    whatsit Dawg Lover VIP

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    state your opinion please
     
  6. Nemo

    Nemo Beer Can Thick Gold

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    I distort
    you deride
    :hat:
     
  7. SleepingWarrior

    SleepingWarrior Well-Known Member VIP

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    SiriusXM would thrive. They could hire 10 decent/mediocre shows that put in 5 days a week 48 weeks a year for what they are paying Howard.
     
  8. whatsit

    whatsit Dawg Lover VIP

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    :jj: okay
     
  9. datchguy

    datchguy New Member Banned User

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    Satellite radio never really seemed like a profitable idea from the start. Now you factor in how SiriusXM is mismanaged and all the various factors, they're on a limited time scale.
     
  10. ohmicah

    ohmicah Real Gad About Town

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    Sounds like either stock manipulation or Buchwald is afoot here.

    The article If Howard Stern Leaves, Will Sirius XM Survive? originally appeared on Fool.com.
    Fool contributor Daniel Kline is long Sirius XM. The Motley Fool recommends Apple and Yahoo! The Motley Fool owns shares of Apple and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy
     
  11. whatsit

    whatsit Dawg Lover VIP

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    I drove across country and it really made it a more pleasurable drive. At home it's better on the computer. I bought two cars where they give it to you at a discount for I forget how long. I guess I don't know the answer to the OP's question.
     
  12. Joe Bauers

    Joe Bauers Well-Known Member

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    Why pay for Sirius , when you can get the milk for free ?
     
  13. Mulletude

    Mulletude I'm Big In The Hate Club, Ya Know VIP

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    Survive? It may be their only chance. He's like the washed up 40 year old ex All-Star with a monster no-cut contract who can't hit his weight. If he's cut loose, it'll free up millions for them.
     
  14. BeerCanThick

    BeerCanThick Well-Known Member

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    The 2007 cumulative listenership for a 4 daya week show with Artie was 1.2 million.

    How can you make a value judgment,a paycut/fire decision, if the guy does not even release what his
    performance is to the general public?

    I could just as easily speculate that he has less than 400,000 Stern For Life, Stern Leaves I Leave fans and say
    that comprises close to the entirety of his satellite radio fandom.

    Who here really believes thatnow? If he had 1 million paid listeners paying a premium to hear him,
    we would know. If the ratings were that good, we would know, man.
     
    Last edited: Jan 15, 2014
  15. datchguy

    datchguy New Member Banned User

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    Well I wonder how many people have already left and specifically cited "Stern is quarter assing it" as their reason. I believe it was our dear Sammy that did that. Cancelled his SXM sub and told them explicitly it's because of Stern.
     
  16. Nemo

    Nemo Beer Can Thick Gold

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    Maybe just a Stern show fan.
    He has a pet named cookiepuss.

    When has stern been talking about leaving or retiring at the end of this Sirius deal?
    Howard hasn't played that card yet during this contract.
    He is too busy planting the seeds to bring other fake players into the fold to make fake offers so he can prank Sirius into another deal. Howard wants no part of any radio job that involves actual ratings.....ever again!!
     
  17. BeerCanThick

    BeerCanThick Well-Known Member

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    Well, there was that surveyfor why people quit. One of the selectable options was something like THSS is rarely on and of low quality to me or something like that. It is well known that post-Artie, 6 show a month Stern has had disgruntled fans bail on him.

    THSS having the no-ratings talk about the show is the sort of silence is deafening fact that defines
    the show. He must be well under half a million true listeners.
     
    Last edited: Jan 15, 2014
  18. Rob0729

    Rob0729 Well-Known Member

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    Let's explore the BS of this article, shall we?

    Isn't about half of the 25.56 million subscribers using XM technology and cannot get Howard at all? Even if it isn't half, it is certainly a large percentage like 40-45%. If I remember correctly, XM brought 12 million subscribers with them to the merger who signed up for any number of reasons that had absolutely nothing to do with Howard. Also, a large number of the current subscribers are on free trials from their car system and may not even use the Sirius at all. And even if they are, they aren't paying a dime to listen.

    And word is that Sirius inflates their subscription base by being slow to take cancellations off the number.


    Except as I stated above, probably isn't 60% of the Sirius listeners that can even get Howard. For this number to be remotely true, basically everyone who owns the Sirius technology would have to be listening to Howard. Apparently there are XM technology users who are listening to dead air on Howard 100 in hopes that they might get a second or two of Howard if the system screws up and gives them a Best of Sirius package by accident.

    Except subscribers are not unique listeners. Many subscribers have multiple units and subsequent subscriptions are at a reduced rate (a think $6 million a unit). The Internet only package is significantly less than $14.99 a month (I think $9.99 a subscription). So if Howard left and brought 1 million subscriptions with him, it would be far less than $178.8 million a year. And that doesn't count the people who bought lifetime subscriptions when they offered them which aren't drawing anymore revenue and people who threatened to cancel to get cheaper subscription rates.



    And the fact that Rock as a format is dead on radio has nothing to do with two rock oriented radio stations failing? Or are we now crediting Howard's move to Sirius as the spark that killed Rock? It isn't like K-Rock changed format and WBCN went away and another rock station took over as the dominant radio station in the area. Terrestrial radio just shifted to prepackaged pop stations, Rap/Hip Hop, and country. The rock radio stations Howard was on would have probably failed with or without Howard. I know Howard during the last years on WBCN fell as low as 6th place in morning drive in some books.

    Yet, with Howard pissing off his listeners by 2-3 day work weeks, endless vacations, and AGT talk did nothing to affect that churn rate even though people did get fed up and cancel subscriptions.
     
  19. Nemo

    Nemo Beer Can Thick Gold

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    Stern AGT ratings disaster can't be overlooked....and Howard knows it.
    Expect shit factless pro Stern stories like this to come weekly now!
     
  20. Nemo

    Nemo Beer Can Thick Gold

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    The only thing this guy failed to mention was Howards rock hard abs!
    :lol: