Monday, February 9, 2009

Will Howard Stern Kill Satellite Radio?

Before his $500 Million dollar deal with Sirius Satellite Radio, neither XM or Sirius were profitable companies. Sirius was gambling on the hope that Stern would leave FM, move over to Sirius, and his huge fan base would follow.

Unfortunately for Sirius, this never happened. The amount of subscriptions and radios that followed Stern was dismal. However, they had already signed their deal. Howard was in, he was the horse to which Sirius had hitched their future.

At the time, XM was the stronger company. Although they had a similar product offering, they had better technology (smaller higher quality radio units and antennas), and better performers.

Opie & Anthony, for example, were on XM. Howard Stern has a history with them stemming from the days when they were both on the same station years ago. O&A were not a $500 Million Dollar overhead for XM and they did perform well for the company. Sirius had nothing to compete with O&A.

Long story short, Sirius & XM merged. The expectation that Sirius would fail and XM would survive was no longer an option. By joining the two companies, the failure of Sirius and Stern would be a failure of XM, Considering that Howard Stern has turned out to be a negative equity investment, it very well could be the final nail in the coffin of the satellite radio industry.

Conspiracy Theory: Howard Stern has long attempted to silenc Opie & Anthony. Could it be that he wanted to go out with a bang, kill both satellite companies, and destroy the medium which was so perfectly suited for the O&A show?
Posted by Blog Friend at 8:14 AM

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