Stern Dollars...

[Larry Gude]

...as you may know, Howard Stern has joined Sirius radio. You may also have noted that he signed a contract paying him...

$500,000,000 for five years. A half a BILLION dollars.

$100,000,000 a year. One hundred million a year.

Cough.

Now, Drudge has Howard being pirated, LA Times story...

http://www.latimes.com/business/la-fi-free2feb02,0,6646585.story?coll=la-home-headlines

...but that's not what interests me though it is quite the hoot to watch the young rebel morph into the old man, asking the FEC for help instead of attacking them. Over money no less. One more hypocrite to the pile.

No, what interests me is the math.

Sirius charges $12.95 a month. They say they had about 2.2 million subscribers, roughly $28 million a moth, before adding Howard. 1.1 million more signed up last quarter, presumably to hear Howard. So, they have now 3.3 million which would be about $43 million a month in income.

Howards $100 divided by 12 is about $8 mil or so a month and if his coming brought on the extra 1.1 million, that means he brought revenue of $14 million a month to cover his 8, netting Sirius and extra 6 a month.

Also, Sirius is claiming they will be at 6 million subscribers by years end or about $78 million a month.

Now, these are gross dollars and I have no clue what their expenses and debt service are plus they have 124 channels of programming to pay for but, it's possible that Howard Stern could be...

Underpaid.

 

[mrweb]

Underpaid.

Poor Howard, how will he ever make ends meet.

 

[Mikeinsmd]

I wonder if Howards crew (Robin, Gary, Artie etc...) come out of his $100 mill. I'm thinking they do.

 

[FromTexas]

Don't be that generous to Howard. The marketing shows his price was too high (as the stockholders determined when the deal was made... ). I sure hope they bought every right to his name...

http://www.bridgeratings.com/press_122805-SternQ4Subs.htm

 

[FromTexas]

And it only gets worse when you look at these numbers...

 

[Larry Gude]

Help me here Tex...

..if I read that correctly about 20% of ALL 18+ would subscribe.

40% who hadn't heard him would listen, 1/2 of them would buy (20% of that whole group)

30% who had heard him would listen, 60% of them (18% of that group) would buy.

Right?


So, how many 18+ out there? CIA says there are 180 million of us 15-64.

For Sirius to get there 3 million more by years end they need a pool of only 15 million.


Help me here. Sounds like they are gold.

 

[Angel]

I love Howard, but I'm all about some free radio. I'm not about to pay for anything I can get for free. EFF that.....

 

[MMDad]

Howard's End
Stern's show puts the "um" in "tedium"

http://www.rollingstone.com/news/story/9181584/howards_end/

Sounds like a bad investment to me!

 

[Larry Gude]

Angel...

I love Howard, but I'm all about some free radio. I'm not about to pay for anything I can get for free. EFF that.....

...you can't get howard for free, legally.

If I was on the road more, traveling, not jsut in the same area, I'd have one of them. It's sucks to lose a program or only be able to find C&W.

Every traveling sales guy I deal with has it and is happy about it.

 

[FromTexas]

..if I read that correctly about 20% of ALL 18+ would subscribe.

40% who hadn't heard him would listen, 1/2 of them would buy (20% of that whole group)

30% who had heard him would listen, 60% of them (18% of that group) would buy.

Right?


So, how many 18+ out there? CIA says there are 180 million of us 15-64.

For Sirius to get there 3 million more by years end they need a pool of only 15 million.


Help me here. Sounds like they are gold.

Read your stats more carefully. That poll is of "radio listeners".

18-20% basically are saying they would choose Sirrius over XM if they bought a satellite radio. That is how I would interpret that since satellite radio doesn't even have a 20% share of the total radio market yet.

Now, to make it even worse...

Only 33% of radio listeners are car listeners... satellite radios main target (not only, but main) and of the radio listening audience between 18-34 (the main Stern audience) only up to 10% are talk radio listeners.

Now, all of these stats played like yours and with these assumes a market vacuum of only Sirrius. There is XM which also has things Sirrius doesn't (just like Sirrius has stuff XM doesn't). These polls are asked in a vacuum of only relating to Stern without comparison. So, first you must take the total market that would actually buy satellite radio, factor in which ones would buy Sirrius, and then factor in which of those bought Sirrius with Stern as a deciding factor.

The first numbers also show that he got a swift kick up for Sirrius but the growth from him has been declining since... A year from now I predict he is shown to be a bad investment.

 

[Larry Gude]

Everyone I know...

...listens to the radio.

And I know several people who have satellite at home and/or in their place of business.


As for the rest, if you say so. I mean Sirius obviously wants you to come for Howard over the competition and stay because everything else they have is as good or better than the competition. Or so they see it.

Adding 3 million by years end don't sound like much to me.

 

[FromTexas]

Now.. lets look at the opposition..

GM and Honda to produce more than 2 million 2006 XM-equipped vehicles

In September, General Motors announced the production of its 3 millionth vehicle with a factory-installed XM radio. General Motors also announced it plans to manufacture 1.55 million vehicles factory-installed with XM in the 2006 calendar year. In addition, Honda announced its plans to produce 550,000 XM equipped vehicles in the 2006 model year, compared to a 2005 target of 400,000. XM's OEM partners represent 61 percent of the U.S. auto market, with automotive partners Toyota and Hyundai gearing up for XM factory installation beginning in the 2007 model year.

Wow! Give people the radio already! Now that is a partnership that pays off. If it gets them just 33% of those who buy, then they get a Stern jump for no real cost.

XM is supposed to have hit 6 million already the end of 2005.

Stern was a move to catch up to XM's phenomenal subscriber growth. It delivered... however, it looks to be a short pop. Its no real benefit if its not long term... and Sirrius shareholders saw that:

Shares of Sirius have fallen nearly 10 percent in the past month and are down almost 14 percent this year

Trust your investors.

 

[Angel]

...you can't get howard for free, legally.

If I was on the road more, traveling, not jsut in the same area, I'd have one of them. It's sucks to lose a program or only be able to find C&W.

Every traveling sales guy I deal with has it and is happy about it.

Sorry... Maybe I should have phrased that differently... I love Howard, but I do not listen to him any more because I refuse to pay for his show or contribute to his alimony payments. I'm too chicken s**t to figure out how to get him for free, illegally.

I still have my Don and Mike for free during the ride home and other music stations which are free.

I do agree, that should I have a job where I'm on the road all day, I would consider satellite radio.

 

[FromTexas]

Wow! Give people the radio already! Now that is a partnership that pays off. If it gets them just 33% of those who buy, then they get a Stern jump for no real cost.

BTW - I call that a Stern jump based on Sirrius's assumption that they need 1 million new subscribers just from Stern to pay for Stern. 33% of all those cars is 1 million. I would bet once the radio is in the car the subscription rate is much, much higher.

 

[Larry Gude]

Oh...

Trust your investors.

...kay.

 

[FromTexas]

...kay.

Its good advice. Enron? Started selling off weeks before it all started coming out. The first people to notice something funny? The die hard stock investors on investment forums and blogs. More often than not, the group mentality knows when something is up.

 

[Pete]

The money Sirrius is paying for Stern goes to his company (per an interview with O'Reilly). I assume that the company is responsible for all the direct Stern show costs such as employees of the show. Still alot of money.

Sirrius went this route because they were desparate to get a footup on XM who had a big head start. It doesn't hurt that Mel Karmazin is now running Sirrius. He was at the helm of Infinity during the Stern years and they know each other well. Apparently Karmazin is verey good at what he does. We'll see if he can make it fly.

Personally Stern bored me. I had Sirrius for about a month. I switched to XM because it came with my latest car. Satellite radio is euphoria for talk show fans.

I like the streaming audio you can get on your PC but you cannot get talk radio on the PC.

 

[Mikeinsmd]

I love Howard, but I'm all about some free radio. I'm not about to pay for anything I can get for free. EFF that.....

I say this too....for now.

How many said it about free TV?? Remember channels 4, 5, 7 & 9?? That's all we got. Who would pay for TV when it was free??

Then along came HBO........


btw....morning radio SUX now!!!

 

[Angel]

I say this too....for now.

How many said it about free TV?? Remember channels 4, 5, 7 & 9?? That's all we got. Who would pay for TV when it was free??

Then along came HBO........


btw....morning radio SUX now!!!

You are right, there was a time when people refused to pay for television channels. However you will find few people excited about radio programs today, as they were before television. Now A days radio is more of a temporary distraction as opposed to the time when people who tuned in specifically to listen to the early story tellers prior to television. I remember the days of rabit ears... I also remember my Dad asking me to get up and change the channel for him (the days before remotes... I feel so old) or to hit the TV to get the lines out! lol... Did anybody else have to hit the TV to stop the lines from rolling up or was that just me and my redneck family?

 

[FastCarsSpeed]

LOL Sirius also have many outside companies advertising now that is a big deal. Everything on the Stern network 100 and 101 Im sure are paid out of the 500 mil. Bubba the Love Sponge is the best afternoon drive home Ive had in a while. Ive had sirius for almost 3 years now and I can say that this is some of the best radio yet. Howard is very subdued on Satellite which I think is alot better then when he was on regular radio. If I want to listen to music with no commercials I do it. If I want talk radio I got it. If I want news or weather or traffic reports I got it. Now granted the traffic doesnt have hardly any SOMD traffic but not many channels do anyway.

Im sure Howard is making sirius bundles of money from this deal and I suspect they will have 6 million subscribers by years end with the prices of the units coming down now.. Hell I pay for two units one for my car and one for my gf and she loves every minute of it.