The Stern effect

Compare Reuters’ coverage of Sirius chief Mel Karmazin’s remarks at their conference in this story and this blog post. The story says: ” ‘How are we reliant (on Stern)?’ Karmazin said at the Reuters Media Summit in New York. ‘I don’t think we’re reliant in any shape or form. We have 135 channels.’ ” But on the blog they quote Karmazin saying:

“Howard would say that we had 600,000 subscribers (in December 2005) and we now went to 6.3 million (subscribers). Well, over 5 million people subscribe to Sirius paying $12.95 a month or $130 a year times 5 million (additional new subscribers after Stern joined) … So gee, based on Howard, you (Sirius) brings in $500 million a year and you only pay me (Howard) $100 million. (Howard would say,) ‘I didn’t do so well in getting paid.’”

“Some of the geniuses on the sell-side (analysts on Wall Street) said the Stern Effect would be in December (2005). And then when we had a great January, they said it kicked over to January. Then they said, when we came out with our first quarter 2006 (financial report) … the Stern Effect is for ’06. Then when we said what about the second quarter? Well that’s the Stern Effect still. Then when I mentioned to you the third quarter retail net adds (net additional subscriber additions) were, that’s the Stern Effect. Well, I believe the Stern Effect, like any other content, is going to be there whenever the consumer is going into the store to make a decision on which product to buy.”

  • http://airwave64.blogspot.com Frank Strovel III

    I bought a SIRIUS radio/subscription for Howard Stern but if he were gone tomorrow I’d keep it because I love the overall service that much.

  • LanceThruster

    I agree with the above but it goes beyond that. Howard has created a brand loyalty. I would not want XM even when Howard’s contract is up. It makes for great Sirius PR that they nabbed Howard and had their priorities straight in pushing that gambit. I had previously thought that XM had the cooler name and logo but with all the stories I hear about their 2nd-place, also-ran status, they have the stink of “loser” about them. I’d be afraid of them going belly-up someday.