Will Howard Stern deal turn satellite into a star?

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Curious he chose Sirius. About four months ago, when the FFC s*hit hit the fan and he was talking about leaving, I wrote to him (or his minions) at howardstern.com and suggested Sirius, over XM, for many good reasons.

Sure, Stern's success to this point was being on free radio. Television's success was being free, until, whoa, the pay-TV people started doing it better. Assuming he's got a big enough brand name, people will follow.

The rationale for Siruis? Well, several. The tech, for one. They have a much higher satellite position, so they don't need repeaters in most locations. In any city, XM needs repeaters. They lease them from.. you guessed it, ClearChannel.

More tech... you can argue about the sound quality, but what you can't argue about is that Sirrus uses the Ibiquity audio compression technology. Proprietary, sure, but this is also the technology accepted for HD Radio in the USA. Much like Echostar and DVB jumping on the MPEG-2 bandwagon, this is going to keep prices for gear low. I anticipate that Sirrus gear will be "free" with a year or two license, before long, following the cellphone model.

Then there's the fact that Sirrus is very heavy on talk radio, XM is poor. Stern does a talk show.

Then there's the fact that Sirrus is currently behind. Sure, they started second, and don't even optimistically expect to reach profitability until the end of 2005. But more to the point, they need Stern more. That's why his deal gives him control of three channels. They're also based in New York... I don't see Stern moving to D.C., or being happy in a satellite studio.

Basically, if you actually look at the situation (rather than you purchased XM gear), Sirrus was beyond a doubt the best choice for Stern. That's not saying its your best choice, but hell, I could figure this out. Stern figured it out. If you didn't, you aren't actually studying the market, you're just reacting to "he didn't choose the system I've invested in".

-Dave

Posted by: dhaynie@...   Posted on: 10/08/04 You are currently: a Guest | Members login | Terms of Use

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