Did Howard Stern kill satellite radio?

Satellite radio was a contender.  Like FM in the late sixties it was based on broad playlists, doing something different, that people believed in and sold religiously via word of mouth.

Then came Howard Stern.

Sirius was a dying service.  A clone of XM.  With broad playlists and very little traction.  In order to save the company a terrestrial radio consultant was hired.  Who tightened the playlists and employed jive-taking deejays.  And then came Howard Stern.

Howard Stern, for all his success, is a polarizing figure.

Doubt me?  Then just think back a decade ago when his minions used to call every OTHER talk show in the country, both radio and TV, and say "Baba-Booey!" or other such nonsense.  Those not in the club thought these usually male pranksters were idiots with no lives who pledged fealty to the king of adolescence, not of all media.  Howard Stern was akin to Styx.  Or maybe Ozzy Osbourne.  A cult.  Far from insignificant, but by no means dominant.  A heavy metal club for the alienated and secretly deranged.

Howard Stern became the face of Sirius Radio.  He hawked it the same way he hyped Snapple and the other advertisers who bought time on his show.  It was endless shilling.  Lacking credibility.  Not so different from Ed McMahon selling dog food.  You could tell, his main motivation was to get paid.  And that he was.  Les Moonves even sued him for part of the action.

What else was on Sirius?  Who knew and who cared?  Howard’s peeps, and a very small portion of them I might add, bought inferior hardware and installed it in their cars just to listen to their guru.

And those who hate Howard Stern, and have had enough of his sex-focused talk?  They said GOOD RIDDANCE!  As Howard faded from the national stage and played in his new little backwater.

So now satellite radio, instead of being a haven, became a POLARIZING service.  Either you were for it or against it.  Either with Stern and his people or running away from them.

As for XM?  The service was a deer in the headlights.

Trying to keep the financials in mind, holding a decent business as opposed to the floundering Sirius, XM was low on marketing and high on word of mouth.  XM was the field of dreams service.  Just make it great and people will come.  Hugh Panero and his troops were no match for Scott Greenstein and ultimately Mel Karmazin.  It was the little league versus the major league.  The rubes versus the city folk.  Tony Brummel versus Lyor Cohen.  XM was blown completely out of the water.  Who cared about steak if there was dazzling sizzle?

Sirius painted the house while XM was furnishing theirs.  Sirius hired every famous name in music and gave them a channel.  And people NOT in music, like Martha Stewart.  Forget that almost none of them were broadcasters.  We live in a star-based world, get stars and the people will COME!

But that’s just what the satellite customer abhorred.  The celebrity-driven culture jammed down their throats.  Satellite radio went from refuge to usual suspect OVERNIGHT!

Who gave a shit about Eminem and Shady 45?

And then who cared about XM’s pale answer back with the I’ll sell to anybody Snoop?

Yes, seeing that Sirius was getting all the ink, all the attention, XM decided to imitate, POORLY!  They kicked the tires on every piece of talent.  Signing very little.  It was like a minor market team with a COUPLE of stars and unknowns.

Then XM let NASCAR go and got baseball.  So what you ended up with was the Howard Stern service versus the baseball service.  And if you didn’t like Howard or baseball, you tuned out completely.  These services WERE NOT FOR YOU!

You wanted a respite.  You wanted a new place where you were respected.  And you found it.  With your iPod!

Nothing you didn’t like appeared on your iPod.  Your iPod was your friend.  It never crossed you.

Heard anybody sell you satellite radio recently?

Almost never happens.

Prior to Howard, satellite radio listeners were religious devotees.  Who got you in their cars and MADE you listen.  Waxed rhapsodic and INSISTED you sign up.  Now they’re selling a shopworn story.  Which their friends are not interested in hearing.  Since they ALREADY KNOW IT!

Just like major labels overhype bands and eliminate the discovery process and fandom, so have Howard Stern and the Sirius team drained all the discovery magic from the satellite radio sphere.  EVERYBODY knows about satellite radio.  They want to hear about something NEW!

As for how the movie plays out…

Sirius trumps XM.  XM thought it was about car installations, partnerships, unique, adventurous programming.  Not realizing their rival, in a death spiral, would play by traditional rules and drag them down to their level.

And on this level, Sirius wins.  It’s got Howard.  It’s got stars.  It’s WHERE IT’S HAPPENING!

But satellite radio ISN’T happening.  Today Sirius has 5.1 million subscribers.  While XM has 7.2 million.  In a country of 300 million, only 12 million people are signed up.  Oh, maybe you use the concept of households.  Well, in a country of 100 million households, just over 10 percent are satellite radio subscribers.

The teen market?  Almost completely closed out.  They never knew good radio and they don’t have credit cards, never mind $12.95 a month.

As for the future?

Sirius gained 441,101 subscribers last quarter.  XM 285,000.  In other words, Sirius KILLED XM.  I don’t know how XM recovers.  Because other than baseball, which the average person doesn’t even know they broadcast, what does XM STAND FOR??  Satellite radio’s image has been tarnished by Howard, without a unique strategy, without an angle, without an identity, PEOPLE PASS XM BY!

And the above rate of adoption is pitiful.  If Apple sold so few iPods, its stock would tank.  OOPS, Sirius and XM’s stock HAVE tanked.

Satellite radio is now niche.  And will be forever more.  Even talk to those who get it free with new cars.  I hear again and again that when the subscription runs out, they’re not going to pay $12.95 a month, they’re just gonna listen to their iPODs!