Is Stern worth his millions?

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On Friday, Howard Stern will sign off from the FM radio medium he's dominated for decades, as he readies his highly profitable shock-jock brand for a launch into space in January.

When Stern goes live as expected on the Sirius Satellite Radio network on Jan. 9, it will certainly mark one of the biggest shakeups the radio world has seen in years and potentially provide an extraordinary shot in the arm for the nascent satellite radio industry.

From Sirius' perspective, it had better. The young company, which has yet to turn a profit since launching its service in 2002, has agreed to pay Stern $500 million over five years to transform his show into two channels broadcasting around the clock. Some of that will go into production costs and the other salaries associated with his show.

Subscriptions, which typically cost $12.95 per month, will have to jump to justify that monster contract--Sirius executives say they need 1 million new subscribers, above and beyond what they would otherwise have drawn, to pay for the deal. No doubt about it: Sirius has all but bet its future on Stern.

That 1 million figure is rough at best, but it takes into account average subscriber fees per month of about $10.81 (lower than retail price, due to promotions and rebates) and an average monthly churn, or cancellation rate, of 1.8 percent, according to the company's latest earnings release. To get there, the New York-based satellite radio network is counting on a sizable portion of Stern's 8 million to 12 million listeners to follow their radio Pied Piper to the subscription service.

Sirius executives already have some reason for optimism. Subscriptions have tripled since Stern announced his defection from Infinity Broadcasting a year ago, from about 700,000 in October 2003 to more than 2.1 million today. And the network thinks Stern is the right bet to help it close the gap against its rival XM Radio, which currently reaches about twice as many people.

Indeed, at the beginning of 2005 the company predicted it would reach 2.5 million subscribers by the end of this year. Now it's instead on track to reach more than 3 million by the end of the year, according to the company's latest earnings release.

"We're not putting a number on it, but we do believe that if he hasn't already paid for himself, then he has contributed a tremendous amount of subscription growth over the last year," said Sirius spokesman Jim Collins.

Under current projections, analysts say it shouldn't be hard for Stern to pay for himself.

"I think it will turn out to be a very astute investment by Sirius," said Sanford C. Bernstein analyst Craig Moffett. "The value of what (Sirius has) already gotten from him in promotional appearances alone is worth tens of millions of dollars in free advertising."

In a recent research note, Friedman Billings Ramsey stock analyst Maurice McKenzie said he expected Stern to draw about 1.5 million new subscribers for Sirius, weighted heavily toward the last quarter of this year, and the first quarter of next, when the buzz around the shock jock's defection is peaking.

http://news.com.com/Is+Stern+worth+his+millions/2100-1026_3-5994210.html?tag=nefd.lede
 
Howard was done at least 10 years ago. Nothing worse than a middle aged hypocritical liar trying to be cool and relevant. He should just retire and hang out with his Trannie-ish looking chick. Opie and Anthony on XM SATELLITE RADIO 202!
 

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Hey, welcome to the forum, RllyRotten!
 
RllyRotten said:
Howard was done at least 10 years ago. Nothing worse than a middle aged hypocritical liar trying to be cool and relevant. He should just retire and hang out with his Trannie-ish looking chick. Opie and Anthony on XM SATELLITE RADIO 202!

I second his opinion.:up
 
Because Opie and Anthony are young, right?

Howard is the biggest name in radio. He's already gotten that 1 million subscribers with more coming, so to answer the topic yes he's worth it. Infinity made $100 a year in commercials, not to mention whatever money the other companies who carried him made. His leaving FM radio has sent shockwaves through the dial. Every channel now is playing fewer commercials and bragging about how they're doing so...They're also trying to upgrade the signal to high def. They didn't do ANYTHING until howard decided to leave for satellite.

They're running scared and rightfully so.

I don't think howard is trying to sound cool when he admits he didn't bang his girlfriend because he wanted to watch smallville, but I understand the point you're trying to make...
 
Well, I can tell you for sure that I didn't choose my satellite provider just for O&A, like I did for Stern. An original--not a wantabe!
 
Actually Rush Limbaugh is the biggest name in radio. He pulls over12 million listeners a day. I think Stern is about 7 million. (if memory serves me correctly on both of those). I'll agree that he is going to be the biggest name in satellite radio, well... actually he already is.

I'm right there with rllyrotten... Stern is washed up, and he could hurt his career here. Satellite radio is not struggling to gain customers because of content, its because people don't know enough about it, or they have heard people describe that signal can cut out if your driving on a road with lots of trees, under an overpass, next to a semi-trailer... along with many other things, and they assume that its not worth paying a subscription to something that won't work regularly.
 
I agree with you

Purogamer said:
Because Opie and Anthony are young, right?

Howard is the biggest name in radio. He's already gotten that 1 million subscribers with more coming, so to answer the topic yes he's worth it. Infinity made $100 a year in commercials, not to mention whatever money the other companies who carried him made. His leaving FM radio has sent shockwaves through the dial. Every channel now is playing fewer commercials and bragging about how they're doing so...They're also trying to upgrade the signal to high def. They didn't do ANYTHING until howard decided to leave for satellite.

They're running scared and rightfully so.

I don't think howard is trying to sound cool when he admits he didn't bang his girlfriend because he wanted to watch smallville, but I understand the point you're trying to make...

stern has 12 to 15 million listeners

1 million listeners at 13 bucks a month pop. doesn't take a rocket scientist to know he will bring revenue in. It is irrelevent whether you or I care for stern, there are enough listeners who do
 
joedekock, limbaugh and stern both have about the same number of listeners

this has nothing to do with likes or disklikes, it is business, and sirius will be in the black by the end of 2006

Incidently, I own both sirius and xm stock. The next best thing to a monopoly is a duopoly and that is what we have
 
jeslevine said:
stern has 12 to 15 million listeners
1 million listeners at 13 bucks a month pop. doesn't take a rocket scientist to know he will bring revenue in. It is irrelevent whether you or I care for stern, there are enough listeners who do

But how does that pay his 500 million? If you take the figured 3 million subscribers there is now, and let's say he will bring over another 3 million subscribers in the next 5 years, (lets be honest, not even Stern is going to have that big of a movement follow him to satellite radio. remember, majority of people still think its ridiculous to pay for radio). That comes no where close to $500 million over a 5 year period.

Only time will tell.
 
jeslevine said:
joedekock, limbaugh and stern both have about the same number of listeners
this has nothing to do with likes or disklikes, it is business, and sirius will be in the black by the end of 2006
Incidently, I own both sirius and xm stock. The next best thing to a monopoly is a duopoly and that is what we have

Respectively... I never mentioned anything about likes or dis-likes. I was saying that to pay that much money, banking that Stern is the savior for Sirius, is ridiculous. Again I don't believe content is the issue, and I don't believe that Stern is going to pull enough subscribers over for Sirius to fulfill their contract to him. So either Sirius will go under, (or sell out), or Stern agrees to take a pay cut, or leaves.

This is only MY opinion.
 
joedekock said:
But how does that pay his 500 million? If you take the figured 3 million subscribers there is now, and let's say he will bring over another 3 million subscribers in the next 5 years, (lets be honest, not even Stern is going to have that big of a movement follow him to satellite radio. remember, majority of people still think its ridiculous to pay for radio). That comes no where close to $500 million over a 5 year period.
Only time will tell.

Have you checked your math??

If Stern brings only 1 million new subs to Sirius. They make money.

Sirus pays him 100 million a year.

1,000,000 x $12.95= $12,950,000 a month of extra income.

$12,950,000 x 12 months= $155,400,000 a year.

$155,400,000 x 5 years=$777,000,000 in income.

$777,000,000 - $500,000,000= $277,000,000 net profit for Sirius.

They are going to be raking cash in off of him. I honestly believe he may bring over half of his listeners to Sirus.
 
perfect math - and that doesn't even take into account how many users like me that have more than one radio at an additional $6.95/mo. and as i have read they are already way ahead of their new sub target numbers. it isn't all about stern, but he sure isn't hurting.
 
He's already gotten that million, and you know there are millions more coming, this was a good move for sirius. It's not just howard fans, it's the friends of howard fans who will get turned onto satellite by word-of-mouth of non-howard content. It's like cable, word spread...

Sirius probably makes money on every piece of hardware sold too right? Or are they still losing money on certain products? Regardless, they're making plenty of money now...

Rush may have more listeners (he's in a lot more markets no? AM for christ's sake...), but howard is more famous. Everyone knows howard stern...
 
joedekock said:
Actually Rush Limbaugh is the biggest name in radio. He pulls over12 million listeners a day. I think Stern is about 7 million. (if memory serves me correctly on both of those). I'll agree that he is going to be the biggest name in satellite radio, well... actually he already is......
Rush has more listeners for about the same reason that ESPN has more viewers than HBO--his show is free to stations & Howard charged stations for his.
(Yes, I realize that ESPN isn't free to providers, but you'll definitely pay a lot more for HBO.)
 
charper1 said:
perfect math - and that doesn't even take into account how many users like me that have more than one radio at an additional $6.95/mo. and as i have read they are already way ahead of their new sub target numbers. it isn't all about stern, but he sure isn't hurting.


Stern will add millions of dollars to the Sirius coffers with advertisement revenue. I believe Infinity currently books a hundred million bucks per year now from Stern. Stern was, is and will continue to be a good deal for Sirius. :hungry:
 
I love the ad I just heard on a "best of" rerun...not word for word because I was laughing...

"Heavy metal band is going to release a CHILDREN'S ALBUM. Let's play some clips from The Hokey Pokey, Hey Diddle Diddle...Please insert 25 cents...

...You shouldn't have to pay to listen to the radio. This message has been brought to you by the 13,000 free radio stations who believe radio is something you shouldn't have to pay for..."

Yeah, a COMMERCIAL to remind me how great radio is...ummm...oh, and you're right, radio SHOULD be free. Thanks for not policing yourself and being such money-hungry pussies that you lost all control of your medium and allowed satellite to even have a purpose, let alone be as kick-ass as it is.

Thanks Terrestrial Radio, Thanks for dropping the f**king ball...
 
As a subscriber to both XM and Sirius. I would say I was sceptical on whether or not this deal would pay off for Sirius. However if there holiday sales are in line with what I saw this weekend they will probably be fine. I was at 2 bestbuys and circuit citys this weekend and while this really means nothing in the big picture Sirius units were flying off the shelves. I saw tons of people with them in their carts at best buy and saw many people walking around with them at CC.

To be fair the XM radios were all gone at the two best buys with the exception of the airware. Dont know if that was supply issues or if people bought them all.
 
That's the end of my Sirius affiliation. When someone I dislike is OTA I have the choice not to listen or patronize their sponsors, but when I am paying for a service and someone I despise is being payed with money that comes from my wallet, it's time for termination.
 

Did anyone notice?

James Carville and Luke Russert to host XM Sports Show

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