By: Gino Lattarulo
The big question on people’s minds lately is whether or not the departure of Howard Stern will cause major problems for Sirius XM Radio (NASDAQ:SIRI) . Will he leave? Will he stay? What will they do without him? The sky is falling ! The sky is falling! Mommy help! Enough already. The time for Stern to have such a significant impact on Sirius has long passed. He is the not backbone. Don’t get me wrong, Howard has done wonderful things for the company. He is an absolute benefit to have and if he stays it would certainly be good for business. But please…. The notion that Sirius would be in really serious trouble without Howard Stern is utterly ludicrous. Does anyone really think the company would be so distraught without him that there would be severe repercussions? Obviously so. I think one dim-bulb author actually wrote that the company would go bankrupt without him.
Let me say this. Sirius will be just fine if Stern leaves. And Heaven knows that the cost savings can be re-directed elsewhere into additional talent content. Sure, Howard is credited with adding two million subscribers when he first came on board four years ago but the notion that two million people will cancel if he leaves is very difficult to believe when you consider the amount of content available. We also have to take into consideration the stock action. We all know that a mere RUMOR of negativity will send a stock down let alone a potentially real occurrence. Sirius’ stock action has made no indication that the significant masses will lose any sleep if Stern leaves. Half a million subscribers per quarter in todays economic climate tells me that there is much more going on than just one person or one entity. Stern was defintely the hype that Mel needed at the beginning, of the company but not anymore. It’s a much broader content arena now.
So if you are going to worry about the long term success of this company, divert your brain power toward the real backbone of Sirius, which is the continued growth of auto sales and the success of the big companies that make it happen. Ford (NYSE:F), General Motors (TBA), Toyota (NYSE:TM), Honda (NYSE:HMC), Nissan, Hyundai, Volkswagon, Chrysler, BMW, Kia, Mercedes, etc.
Remember at the end of the day that hype is just hype and opinions are like…. well, you get the idea.
Position: Long Siri.
The real backbone of Sirius consists of content and what is/was it’s technology.
Sirius has not progressed at all in years in terms of technology and until the company can broaden it’s reach beyond that of the latest Hyundai, they will struggle to reach the masses. (anyone over at Sirius working on terrestrial relays…anyone?) People don’t want to be confined to their car or their desktop (for an added price, no less)
On the content front, it’s simple… Content = subscribers and not just those who sign up. Sirius needs subscribers who commit and stay in order to offset the cost of bringing them on board. Stern’s fans are the type who’ll stay and pay month in and month out. Let’s be honest, no one has signed up for Sirius/XM to hear Oprah. (a $50million payday for her to lend her name to a channel to which she does not contribute)
Don’t be fooled by the inflated subscriber numbers. A significant portion of the “new subscriptions” are freebies that come with both new and used cars.
With regard to Stern’s departure….Sirius may not lose his listeners when/if Stern leaves, but they will lose them when he reappears. Particularly if he developes his own digital program that requires a subscription. When faced with paying for two subcriptions, Stern fans will pay for the one that includes Stern first.
Gino, I am a fan of this site and I love Relmor’s technical analysis, but this article by you is nothing more than opinion with very little to back it up. Just as many people are criticized for writing negative pieces to drive the price of the stock down, this can be criticized as nothing more than a puff piece. I am long on SIRI.
I am a Sirius subscriber. I will be cancelling both of my subscriptions when Howard leaves. Their music programming is just weak. I hear a better mix on FM radio. Their technology is legging behind. Only their content, essentially Howard Stern Show, Stern Show Replays, Stern Show specials are what I pay for. I think your last paragraph is far off. I think the three-four million Stern listeners (not Sirius listeners) will bail on Sirius as soon as Howard leaves.
“Their music programming is just weak. I hear a better mix on FM radio”
That is easily the stupidest thing I’ve heard in a lot time.
Wow, I really can’t believe what I am seeing. You only attribute 2 million subscribers to Stern?? You gotta go back and do your research…Sirius goes bankrupt within 2 years of Howard leaving Sirius.
Sirius has a great variety of programming, I love Howard but most folks don’t.
So I’ll be staying w/Sirius and probably subscribing to his stuff. He is NOT going
back to boring terrestrial radio.
Content is king, and the only content sirius has that is not easily attainable on the internet free of charge is the howard stern show. I think you severely underestimate the amount of people who subscribed to sirius because howard went there. Combine these two facts with the extreme loyalty that howard stern fans have for his show and sirius is in big trouble if they can’t give howard the contract he wants. They WILL go out of business, it’s only a matter of how long will it take?
I came to Sirius because of Howard and will leave if he leaves. Sirius may have other quality programing but none of it would justify the subscription price (for me) without Stern. If Howard leaves, Sirius may cut a significant portion of it’s costs but it will also lose a significant portion of it’s subscriber base and revenue. Anyone who believes otherwise is delusional.
You mean just like Howard Stern’s previous terrestrial stations were “just fine” after he left for Sirius, because they all “redirected the cost savings elsewhere into additional talent content”? Yeah, THAT worked well.
Stern is sui generis in the industry. Rush Limbaugh sells T-shirts and mugs; Stern sells radio equipment and monthly subscriptions.
As for “analyses” that claim a large percentage of Stern’s customers are actually fans of satellite radio in general, and will surely keep paying their $180 per year to keep the Boneyard and the Coffee House and Shade 45? Those analyses are just begging to be laughed at.
I got Sirius for one reason: Howard Stern. I will be canceling the second they lose that reason, if they’re dumb enough to let that happen.
Who is the person who wrote this opinion piece based on nothing more than conjecture? Gino grab some actual facts when writing a piece. Get some quotes from both sides and then you can actually write a provocative piece that has a little backbone. Did you do any research regarding the past before putting this drivel together? Wasn’t this conjecture going around five years ago? What were all the stories being released five years ago? What ended up being the result? How is the CBS radio bottom line since Stern’s departure? How about CC? We already know where Citadel is or do you? Do you have these answers? I actually do. I have been in the business for a decade and a half and must alert you that you are swimming with sharks if you don’t think his departure will have a long lasting effect. JUST LOOK AT WHAT WENT DOWN 5 YEARS AGO. Every single one of his stations has flipped its format, some multiple times. They are still trying to find the answer.
You want to go with the angle that Sirius, who barely turns a profit, stock is deplorable, technology is already outdated, who’s medium predecessor is battling for its life to stay relevant, can turn away Stern and not take a nose dive? Again, have you any understanding of what drives a successful radio outfit? Hint, it’s not because a Ford has a radio in it. Might I suggest you’re the dim-bulb author and you should try diverting your brain power to actually refocus, rethink, research, and rewrite this story with some actual meat in it.
BTW – Journalism 101 suggests you use the person’s last name when addressing a person for the first time. Especially someone who is a CEO. Perhaps you could have wrote, Mel Karmazin, CEO of Sirius XM, then follow with your vapid content.
And Mel doesn’t need Howard anymore huh? Wow you’re a complete waste of time and space. You don’t know a thing about this business or how Karmazin operates. Success has a formula. You don’t know it sadly. Perhaps you should ask him yourself if he still needs Howard?