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Stern's Sirius move a vanishing act

September 7, 2006

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September 07, 2006 Stern's Sirius move a vanishing act
by Matthew Flamm

Ever since his move to Sirius Satellite Radio, Howard Stern has been free to discuss bodily functions of all kinds, as well as his guests' (very) personal grooming habits, without worrying about being fined by federal regulators. But mornings in New York have not been the same.

No longer do people come to work repeating a riff on lesbian strippers that they just heard in a cab.

"There is no more watercooler talk about him in the office," says Brian Kennedy, a Manhattan marketing executive who used to listen to Mr. Stern in his car.

The radio icon's move to satellite shook the media world last year, prompting an avalanche of press coverage. But in the months since his morning talk show became available only to paying subscribers, most of the chatter about Mr. Stern has involved his impact on Sirius' fortunes or the lawsuit against him by CBS, his former employer.

Mr. Stern may be the same class clown, but now his outrageous antics go unnoticed by all but a core group of fans.

"Howard was on the front burner," says Mark Lefkowitz, media director at Furman Roth Advertising. "He's not anymore."

At his height, the self-proclaimed King of All Media had a daily audience of more than 12 million devotees, and he could boast about being No. 1 in top markets like New York and Philadelphia.

At Sirius, he can't boast about how many listeners he has, because the company does not report those figures. Steve Mather, a media analyst with Sanders Morris Harris, estimates that Mr. Stern has attracted about 1 million subscribers, a mere fraction of his former draw.

'Slow build'

"He bought his own hype, thinking everyone would follow him to Sirius," says rival host Anthony Cumia of Opie & Anthony. The duo recently took over Mr. Stern's old slot at WXRK--now Free FM--while continuing to do their show on XM Satellite Radio.

The difference between being heard on satellite and on terrestrial radio "is night and day," says Gregg Hughes, aka Opie. On satellite, he says, "it's a slow build, and [your audience] is very thin and spread out."

But Mr. Stern can still take credit for putting Sirius--and satellite radio--on the pop culture map.
Along with Martha Stewart, the National Football League and commercial-free music, he has helped the company grow to 4.7 million subscribers from the 600,000 it had two years ago, when he decided to make the move. Experts say that he will go down in history for his role in popularizing the new medium.

"Saying that Howard Stern has lost cultural impact would be like saying the Beatles lost cultural impact when they broke up," says Michael Harrison, publisher of the radio trade journal Talkers Magazine. "He will be talked about for 100 years as one of the great innovators of radio."

Running in the red

Mr. Stern's supporters point out that he continues to make news in his signature way. Porn star Jenna Jameson claimed on his show that she had once had a tryst with former MTV host Jenny McCarthy. Television actor Wilmer Valderamma talked about the starlets he's bedded. And the three artists who make up the Dixie Chicks, on the show to promote their new CD, described their, um, personal grooming habits.

But while tidbits wind up in the gossip columns, they don't create the kind of buzz they did when Mr. Stern had a bigger, more varied audience.

With Sirius hoping to have more than 6 million subscribers--and positive cash flow--by year-end, Mr. Stern will have to draw on his talent for self-promotion.

The No. 2 satellite service's loss deepened 25% in the second quarter, to $238 million. The average monthly churn, or number of subscribers lost, rose to 1.8% in the period from 1.4% a year earlier. Barrington Research says that Sirius will lose more than $1 billion this year and will not be profitable until 2009.

Industry insiders say that Mr. Stern needs to get out more, the way he did when he was building his audience on terrestrial radio.

"He's back to a startup," says radio consultant Robert Unmacht. "It's up to him to make a little noise."

©2006 Crain Communications Inc.

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