The Stern Broadcasting Corp.

In today’s Daily News, David Hinckley and Talkers’ Michael Harrison speculate that when Howard Stern’s Sirius XM contract is up, he could use the internet to start his own broadcasting company.

Indeed, he could. Technology makes it possible: We could listen to him – and watch him – on the internet, on our iPods, and even now on our web-enabled phones. There’s no longer a need for a distribution network.

The numbers could be impressive. Stern brought an estimated 6-8 million listeners to Sirius. I’ve talked with a measurement company that did a study on his impact on satellite and concluded that a majority of users were there and paying $12.95 a month because of him. So say that half those people – 3.5 million – would pay half that much – $6 – to get Stern anywhere and on-demand. That’s $252 million. Absurd? OK, so charge $1 a month; that’s $42 million (though at a lower price, the volume would surely increase). Add in a little ad revenue but not much, judging on the crap accounts Sirius has been getting. Marketing? Stern doesn’t need it because his audience is his agency. And Stern doesn’t need to share any of that with Sirius XM. His only cost is his staff and bandwidth. Ah, but you say, he made a reported $500 million for his five-year Sirius contract. But I believe some of that came in equity and as a shareholder, I can tell you that isn’t doing so well. The point is, who’s going to sniff at tens of millions of dollars a year? If it doesn’t work, the risk is minimal. So why not?

Hinckley’s point is that the internet enables Stern to have complete freedom, control, and ownership, which is ideal for a control freak like Stern.

Would I pay for Stern? I already do; he’s why I subscribed to Sirius. I’m just unhappy that I can’t get him on-demand on my iPod and iPhone.

Irony that I’m endorsing paying for content when I scoff at news organizations charging? No. I’ve long said that we do and will pay for unique performances – and Stern is unique. News is information, a commodity once known; that’s what makes it hard to charge for. Mere opinion is abundant. Performance has value, in music, in comedy, or even in news.

Who else would I pay? Jon Stewart could charge (though we’d get less time and he probably has higher cost). My list pretty much ends there. How about you?

  • http://www.aboutmattlaw.com Matt

    * Ira Glass / This American Life (and I do sort of “pay” in donation sense)

  • George

    Stern has made reference to doing that twice on the show and it surprises me as Sirius must notice and, IMO, he is vital to their health. Sirius has done nothing but piss me off (Poor quality receiver, poor reception, having to confirm you are still listening to the internet feed or it shuts off, charging more for the iphone feed with no Howard. Sirius is just another cable company.

  • Barry

    I think some big name authors would be able to make a go of it–Stephen King, Dan Brown, etc. Some are already trying. And a lot of the self-help gurus like Tony Robbins, et. al.

    I’ve been following your New News Organization presentation and commentary at FOCAS. Thought-provoking stuff…

  • http://jerseyshore.me Paul

    Anthony of Opie & Anthony is already experimenting with this… with a Video broadcast.

    Take a look at the rather impressive studio he has put in his basement (after the 30 second pre-roll).

    http://www.livestream.com/anthonyradio

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  • http://www.matthaze.com Matt Haze

    Thanks to the iHeartRadio app on my BlackBerry, I can listen to my favorite stations in New York City no matter where I’m at in the country. Thanks to the 1/8″ jack on the side of my BlackBerry, I can plug the BB into my car audio system and hear my favorite stations in my car just as if I was driving down the West Side Highway.

    If others who have the content that I want available in a similar mobile form, I’d be happy man.

    And they would be a very rich person/company.

  • http://www.familygreenberg.com/index2.php Brian Greenberg

    You’re right about Jon Stewart, which of course, leads one to Stephen Colbert. He could do it too.

    All of the Howard Stern descendants (O&A, etc.) that have enough of a following to make it work.

    And then there’s the political set – Rush Limbaugh has an audience much like Stern’s (not in demographics, of course, but in terms of blind loyalty, belief that his opinion/words are unique, etc.) So throw him in the pile, along with Hannity & all the rest. Maybe Bill Maher on the other side of the aisle? Not sure there…

    All of this goes to reinforce your theory: we will pay for unique/value-added products & services, but not for commodities. What Stern’s situation teaches us here is that becoming unique comes first (and often on old media, at least for now…)

  • Tom Wolper

    I would pay for high end art and performance. Cable TV promised it once (A&E) and found it wasn’t profitable (enough) in the cable model. I don’t care too much about the dumbing down of popular culture as there are enough free alternatives from the library and online. But, if we were to take a free performance and add value in return for a subscription fee, I would not make that deal for any part of pop culture. I would, however, make the deal for something more intellectually demanding.

  • http://www.mattazuma.com MattV

    Howard could charge for the live broadcasts and then give them away as podcasts a few days later.

    I wonder if Howard or XM bought the K Rock archives.

    I wouldn’t be surprised if a new deal with XM would include a DirecTV channel.

    I think this only makes financial sense for Howard. The Jon Stewart and the others that people may pay for would lose at least 90% of their audience if they went internet-pay. Ricky Gervais tried to move his very popular podcast to a pay model a few years back and lost basically all of his listeners.

    • Chuck

      Stern has a TV channel, HowardTV, that is an On-Demand service with most cable providers. He took the old E! channel show’s team and hired them all for his TV channel.

      His “History of Howard Stern” radio-doc is an excellent filler when he takes vacation 12 weeks a year. It uses old tapes from K-Rock and WNnnnnnBC days. It’s amazingly done.

      I’d pay for Andrew Sullivan’s blog, its how I got to this story.

      Oh, and… BABA BOOEY BABA BOOEY!!! HOWARD STERNS PENIS!!!

  • http://kentonsinfotainmentscan.blogspot.com/ Kenton

    I’d pay for Ricky Gervais, David Letterman, Howard Stern, Bill Maher, and Brian Williams.

  • Rick

    You have to be able to hear Howard in the car, that’s where most of his audience is. Not enough people can set up a satrad in the office or are allowed streaming at work. Howard is intensely loyal to the radio model, as is his hero Mel Karmazin – viz his aborted/abandoned attempts at TV and movie production. The ch 9 show and the current ondemand show are the radio show in front of cameras. If Stern wants to be in front of an audience he’ll do it radio-wise. He mocks podcasts.
    Cars will eventually have internet connectivity (expect it to cost more than satrad though) but not everywhere like satellite. The next generation Stern (sorry, neither Anthony nor Opie) could well emerge from the internet radio world …

  • http://inblognegro.blogspot.com Gregory J Amani Smith

    I believe in subscription service for the content a person wants. Mark Cuban made a great point about putting a pay wall for content.

    http://blogmaverick.com/2009/08/08/my-advice-to-fox-myspace-on-selling-content-yes-you-can/
    I agree with Mark’s point about bundling services. I pay for cable & SiriusXM because they have content I want. I pay for the sports tier on Time Warner becuase I want that (though the NFL network doesn’t understand that) I pay for the ESPN insider because I like the article and there is no good sports news aggregation site. The smart media companies will do this, even ones with newspapers and newsites.

    As for the Stern idea-Oprah Winfrey, Martha Stewart, Jim Rome, Rush Limbaugh, Dan Patrick, Tyra Banks could do that (Rome actually has a subscription service and does very well). The levels would be different.

    BTW good luck with the robot digging in your crotch stuff.

  • tryaluckystrike

    “Stern brought an estimated 6-8 million listeners to Sirius.”

    In late 2009, we’re still following Howie math? There’s no way that many people are listening to him. Every commissioned survey has credited him with having 1.25 to 2 million subs depending on the source.

    The 6-8 million number factors in people who flip through the dial, end up on one of his channels and listen in for a few minutes or even a few seconds. That’s not a listener and certainly not someone who ordered satellite specifically to listen to him.

    It’s misinformation like this that leads Sirius to ponying up a company-crushing half a billion dollars for 4 days a week and roughly 26 weeks a year of programming that even his most hardcore fanbase has written off as subpar.

    • Chuck

      Site those surveys if you want credibility, friend.

      As far as Stern being a “company crusher”, its not true. Stern is a self contained entity on Sirius. He, unlike the other channels, has commerical sponsors. They basically pay for the programming costs of the radio program.

      But lets say your very lowball number of 2 million people pay 13 bucks a month to Sirius exclusively for Stern. Thats still in excess of 300 million a year in revenue due to Stern alone. Hardly company crushing.

      I’ll venture a guess you are a bitter radio jock making 30 grand a year.

  • http://blog.brocklebank.info Will Brocklebank

    At the risk of making myself poorer I would pay for MacBreak Weekly and TWIG – I think they’re that good. (Not to blow smoke up… etc!)

    Thanks, BTW, for great content, Jeff. PS did you see this article by UK homourist Giles Coren on looking at the paywall debate from the newspaper columnist’s side: http://bit.ly/8ytN5

    • Austin

      “At the risk of making myself poorer I would pay for MacBreak Weekly and TWIG ”

      A thought experiment. Having made the above statement, I wonder: have you gone to TWIT and made a donation? If not, why not?

      I wonder, too: if people have goodwill toward the creators of free product, and they have disposable income that they would readily spend on the same ‘pay-walled’ product, if they don’t seek out a way to send that money to said creators regardless of obligation, are they really as willing to pay for it as they believe?

      It seems to me that the same case works for taxes: if you’re really okay with increasing tax rates, why not voluntarily send more of your paycheck in to the government (did you know you can? It’s true!)?

      I’m not being belligerent here. I’m genuinely curious. I think it’s telling that, in my own mind, as much as I like a piece of free content (a podcast, or a blog) – even to the point of telling myself, ‘wow, this is good enough to pay for’ – if I imagine it going behind a pay-wall, I immediately think: nope. Not gonna pay.

      How many of us out here in the InterTubes are like that? I’d wager that the instance of a single, solid blocking page (not an ad-link clickthrough, but a legitimate stopper that forces you to pay or go away) diverts more than 95% of traffic, maybe even 99%.

      But I could be wrong.

  • smaruzzi

    Guess the rationale is the following: when content makes sense, subscription makes a lot of sense. For users and content producers as well.

  • http://www.shocknetradio.com David 2

    If Howard wants to go private label, we a broadcast facility already in place here at ShockNet Radio. http://s40.photobucket.com/albums/e226/ShockNetRadio/

    Digital satellite radio is a good concept, but it has been an interim one at best until the means are available for the Internet to be accessible everywhere, even in cars. And it hasn’t helped that the FCC has hindered that medium by only giving out TWO licenses (when there were supposedly FOUR bidders), which has now become ONE failing government-endorsed monopoly.

  • Janne Fexman

    Bandwidth for 7.000.000 people listening live? Wow. Now we’re talking. WWGD?

    • Andy Freeman

      Early internet specs including “multicast”, which was basically designed to handle this situation. (I stopped paying attention at that level a long time ago, so I don’t know if it’s still available.)

      p2p can use clients to provide the required bandwidth, so Stern’s broadcast to 70M could easily start from a residential DSL line.

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  • http://www.targetspot.com Doug Perlson

    The ad revenue that was an afterthought in this post will actually be enormous. Sat radio has no ability to target locally, and is actually prohibited from doing so. But web radio can target down to the zip code and offer real measurement. Remember all the advertisers that lined up to advertise on Stern during the CBS days? They will be back. Not to mention new hyper local advertisers that will have a critical mass of listeners that only Howard can deliver. Stern would be able to pay himself more on the web than sat radio could afford to pay him, and can be the true father of the next generation of radio.

  • http://www.filmbuffonline.com FilmBuffRich

    While this would be an interesting direction to go, as a long time Stern fan*, I know that Howard has definitely downplayed the podcast idea. I recall him saying once that audience phonecalls are an integral part of the show and he couldn’t see doing something that wouldn’t be live.

    Of course, he can always stream a show live and then have it available as a downloadable pod cast almost immediately afterward.

    But that still leaves out the live listening in the car element which he has said has always driven his performance. (“Making the guy stuck in his car on his commute laugh.”)

    While I don’t see him making this move, I would still follow.

    *And one who doesn’t fit into tryaluckystrike’s alleged hardcore fan base who have written off the Sirius show as subpar.

    • Chuck

      “But that still leaves out the live listening in the car element which he has said has always driven his performance.”

      A streaming Stern app on Blackberry or iPhone takes care of this issue, I suppose. I plug my blackberry into my radio for music when I’m not laughing at the Stern show.

  • neagrigore

    bill maher also, if only it will work for outside U.S.

  • Clyde

    Chuck:

    Your postings sound like those of a Stern intern assigned to prop up the brand. “I plug in my blackberry into my radio for music when I’m not laughing at the Stern show.” Almost sounds like ad copy.

    But the big elephant in the room here is Stern’s overall irrelevance since going behind the Sirius pay wall.

    • Chuck

      Advertisers don’t seem to find Stern irrelevant. Neither do the countless entertainers who have Stern on the list of “must-do’s” along with Letterman and the Today Show when on their press junkets.

      Stern is not in the news as often, but that has more to do with the end of publicized draconian FCC crackdowns than his lack of relevance. His irrelevance to you is only due to your lack of interest in him, as his relevance to me is do to the fact that I have listened to him for 15 years. Regardless, anyone who has at least 2 million people a day listening live can hardly be labeled irrelevant.

      Moreover, the reality of a post-Stern terrestrial landscape is where his relevance is really noticeable. If Stern is a replaceable throwaway personality with no talent, why hasnt anyone filled the vaccuum that was created with Stern’s departure? There has yet to be a Leno to replace the Carson of morning radio.

      As far as my cheerleader-esque comments, I’m sorry if it seemed a little distateful for discussion sake, but in my defense, I did write the words “Howard Stern’s Penis” on a post before the one you refered to. I am biased as a Stern Fan, just as you probably have a bukkake bias due to the fact you take loads to your face. BaBa effin Booey.

  • Dan

    Have you listened to him lately? Stern serves up an endless loop of the same boring guests, complains about how horrible his job is, then departs on yet another vacation without telling his listeners a thing. I used to be a huge fan of his, but at this point I’m truly bored, which is horribly sad to me as I think he’s a wonderful talent when he makes an effort.

    @FilmBuffRich — he talked about a Daily News article on his possible future plans, and sounded pretty excited about the possibilities of a podcast/download service. Of course, I think he’s full of it — the guy is trying to negotiate a favourable deal for himself his agent Don Buchwald probably gives him his talking points LOL.

    • Chuck

      I disagree about the “boring” comment, but as far as a business move is concerned, you are right on point. I feel this is a large scale chess move, positioning himself for a larger contract while staying at Sirius.

      Stern has 2 Channels programming over 20 hours of live radio every day. He has taken other Stern-esque talents such as Scott Ferrall and Jay Thomas and provided them with an avenue for expression free from the hand of FCC bureaucrats and government sanctions.

      Stern hates for people he has on his payroll to be out of work. He wont leave Sirius because any sort of podcast/streaming internet vehicle will leave the people he has given work to through his two channels out fighting on their own. Stern might not be for everyone, but he is loyal to his employees. See the E! show/ HowardTV transfer of talent as proof.

      But Stern and Buchwald are not dumb. They’ll create leverage if there isnt any to begin with.

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  • http://www.compactfluorescentbulb.info Thomas Williams

    I often watch the Tyra Banks show late in the afternoon. Great show and great host..’`