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Howard Stern Turns to Satellite Radio

RadioEntertainmentRadio IndustrySatellite TechnologyCompanies and CorporationsViacom Inc.Sirius Satellite Radio, Inc.

Shock jock Howard Stern gave a powerful boost to the nascent satellite radio industry today with a surprise announcement that he would move his popular morning talk show to Sirius Satellite Radio in January 2006.

Stern, who has in recent months railed on-air against what he sees as a conservative campaign to censor his Viacom-syndicated show, is by far the best-known broadcaster to migrate to satellite radio, whose two main purveyors, Sirius and its larger archrival XM Radio, have struggled for listeners and financial stability.

However, unlike traditional broadcasters, the satellite companies are not subject to content restrictions from the Federal Communications Commission. The FCC has levied record fines against the 50-year-old Stern for his sometimes raunchy show.

"I'm leaving radio — this kind of radio — and I'm going to the future of radio," Stern told his listeners this morning. "I think radio the way we've done it is becoming obliterated I don't wanna do it anymore it's not fun for me anymore."

Stern's next move had been the subject of speculation since February, when a risque Super Bowl performance by Janet Jackson reopened a simmering debate about media indecency.

The normally ebullient shock jock — famed for his exploits with kielbasa-swallowers and lesbian porn stars — has increasingly devoted his morning show to bitter attacks on the Bush administration and openly mused about a satellite deal after his Viacom contract expired.

The multimillion-dollar Sirius deal — which runs for five years and gives Stern the right to program three channels in addition to hosting his program — will allow Stern to be much more explicit on-air, a fact to which he alluded in a statement. He said the move will take his program "to a whole new level as I bring my fans my show my way."

Stern is expected to take along his crew and on-air sidekicks, Robin Quivers and Artie Lange, when he makes the move.

Sirius chief executive Joseph P. Clayton called Stern "an entertainment force of unprecedented recognition and popularity in the broadcast world, who is capable of changing the face of satellite radio and generating huge numbers of subscribers for Sirius."

He added: "When you look at his enormous existing fan base, all we need is for Howard to bring in a small fraction of his weekly audience for this agreement to pay for itself."

Sirius subscribers pay $12.95 per month for the service, which also requires a special receiver in the user's car or home. The company has signed partnership deals that put the receivers in new cars manufactured by Daimler Chrysler, Ford and BMW.

However, Sirius still has a long way to go before matching the reach of traditional broadcasters. As of September, the company had only 600,000 subscribers. In contrast, an estimated 16 million people listen to Stern on radio today.

Sirius said it will have to attract an additional million subscribers to cover the $100 million a year it will spend on Stern's show and salary as well as the cost of building and staffing a new studio and other new programs. Stern currently earns a salary estimated at $20 million annually.

But Sirius, locked in a costly battle with XM to sign up subscribers, considers the cost of signing up Stern a coup that could bring millions of listeners to digital radio. Ironically, an advertisement for XM topped Stern's website today.

On Wall Street, news of Stern's move to Sirius sent the company's stock jumping more than 17% on the Nasdaq.

Sirius and XM have both been growing rapidly but still lag way behind broadcast radio in popularity and have a long way to go before they recover a combined investment of $4 billion to get established. Sirius, which reported a loss of about $226 million in 2003, said earlier this year that it would need to sign up 2 million subscribers before it broke even.

Stern is hardly the only broadcaster who has moved to satellite. Former NPR "Morning Edition" host Bob Edwards and shock team Opie & Anthony recently signed deals with XM Radio.

Times staff writers John O'Dell and Lennie LaGuire contributed to this report.

Copyright © 2014, Los Angeles Times
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