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Published: Friday, 12/30/2005

Radio's new wave: Satellite broadcasters sign big names

BY ADRIAN McCOY
BLOCK NEWS ALLIANCE
Howard Stern begins broadcasting on Sirius Satellite Radio Jan. 9. Howard Stern begins broadcasting on Sirius Satellite Radio Jan. 9.
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In a few days, self-crowned King of All Media Howard Stern adds another medium to the list - satellite radio. Stern announced last year that he was signing on with Sirius for the freedom to do his morning show in an uncensored environment. Many predicted that it would be the step that finally sold satellite radio to U.S. audiences in a big way.

Adding a radio superstar like Stern is a big victory in the talent war between Sirius and competitor XM Satellite Radio: Both have signed a high-profile roster of entertainment and sports figures to their program lineups.

Stern's Sirius show debuts Jan. 9. Sirius is already on the air with updates on the new show. After lengthy battles with the FCC and fines over alleged obscene content, Stern will now be heard on satellite, which isn't subject to the same regulations as terrestrial radio.

"We beat them at their own game, we figured out how to do it," Stern told listeners at a farewell rally when he signed off Dec. 16. "Change the rules, break the chains, the last of a dying breed."

The Internet search engine Lycos reported in November that Stern topped the list of radio personalities generating search traffic for the fifth straight year. Half of the searches also mentioned Sirius, indicating that interest in the new show is high among many of his legions of fans.

When Sirius signed Stern, it did so with the hopes of attracting some of his millions of fans. Whether the strategy will pay off remains to be seen. There are challenges: Stern's show had some drop-off in the ratings in some markets lately; some listeners complained that he spent too much time hyping his new gig at Sirius.

And how many will pay $12.95 a month and the cost of a satellite receiver to hear him?

Bank of America Securities analyst Jonathan Jacoby wrote that "the Stern effect" is driving sales in the weeks before his debut: "Sirius' ... retail share likely will top XM's for the first time in fourth quarter '05, and it could be slightly higher than our 54 percent share estimate, but it probably won't be much higher. In addition, we do not believe the Stern effect will have much impact on retail sales beyond first quarter 2006. We would expect that retail will move closer to a 50/50 parity."

Stern isn't the only big fish to enter satellite radio's talent pool. This month, XM announced that Bob Dylan will begin hosting a program in March. The singer/songwriter will do a weekly program on XM's Deep Tracks channel, programming the music and interviewing other artists.

The talent wars are only the latest strategy in the rivals' quest for new subscribers. "They're spending enough to feed and clothe at least one or two small countries," says Tom Taylor, editor of the radio trade publication Inside Radio. "There's clearly a keeping-up-with-Joneses factor here. They're highly competitive, as they invent a new industry. And that's really what this is."

Star power isn't what's driving most people to satellite. Most are drawn to the commercial-free music formats and the wide access to news and information.

With its amazing array of music choices, satellite has added a new dimension to pop music. Satellite can jump on new music trends quickly: For example, both Sirius and XM added the Latin hip-hop Reggaeton format to their music lineup this year.

Satellite also is the new home for many popular radio talents - some who were fired from the commercial airwaves and others who are syndicated but not heard in all markets.

XM hired controversial shock jocks Opie and Anthony after their departure from commercial radio. Former NPR host Bob Edwards hosts a morning show on XM. Air America, the progressive liberal talk network that features hosts Al Franken, Randi Rhodes, and Janeane Garofalo, is available on XM, which also airs syndicated talk host Phil Hendrie.

Sirius will carry a show by another controversial radio shock jock - Bubba the Love Sponge. Former MTV veejay and podcasting pioneer Adam Curry is on Sirius.

Dylan is the latest in a series of popular music industry figures to go behind the mike. Snoop Dogg hosts a hip-hop/rap program on XM. Tom Petty has a weekly show on the Deep Tracks channel that will carry Dylan.

Sirius also launched E Street Radio, a 24/7 Bruce Springsteen channel featuring music and interviews, which is scheduled to run through Jan. 31.

This year, Sirius added what was up to now only heard online - Jimmy Buffett's Radio Margaritaville. Sirius will air live broadcasts from Buffett's Margaritaville restaurant in Orlando, Fla.

Shady's Uncut Hip-Hop is an uncensored hip-hop channel created by Eminem and Sirius.

This fall, Sirius launched an all-Rolling Stones channel to coincide with the release of "A Bigger Bang." An all-Elvis Presley Sirius channel broadcasts live from Graceland.

Sirius picked up an influential music source from overseas - BBC Radio 1. The schedule is shifted by five hours so American listeners can hear the programs in the same time slots as they air in Britain.

Other entertainment and sports figures who've climbed onto the bandwagon include New York Yankee Derek Jeter, who signed a deal to promote MLB channels on XM: He'll make several guest appearances on XM's baseball news and talk channel, and Los Angeles Lakers coach Phil Jackson, who hosts an NBA talk show on Sirius.

Both networks are courting the female audience. The Martha Stewart Living channel debuted on Sirius last month. Stewart hosts a weekly program, along with other experts who give advice on cooking, decorating, gardening, and more.

Ellen DeGeneres' show is broadcast on XM's women's talk channel Take Five, along with one hosted by model Tyra Banks. XM will launch The Good Morning America Radio Show on Jan. 23, with Diane Sawyer, Charles Gibson, Robin Roberts, and radio personality Hilarie Barsky.

Satellite radio launched in 2001 - XM in September and Sirius in November. Their aim was to super-serve listeners with more music, more formats, better sound, and fewer commercials, much like cable is a paid alternative for television viewers. Although the number of listeners is dwarfed by terrestrial radio, subscriber growth has been steady. Both stations have more than 100 channels and have added channels through the years.

This year was a big one for the satellite rivals, which saw increased expansion of their subscriber bases. XM continues to lead the pack with 5 million subscribers and is projecting 6 million by the end of the year. DirectTV subscribers can now tune in 72 of XM's music, talk, and children's channels.

Sirius added 359,000 new subscribers in the third quarter, bringing its total to 2.17 million. The company recently surpassed the 3 million mark.

Both services have a $12.95 basic monthly subscription fee.

Both satellite companies have yet to see a profit, and this holiday buying season is a crucial time for them. Both have launched major marketing campaigns and are offering rebates on new receivers, and new options for listeners. The original push was on car radios equipped for satellite reception, but new portable models take satellite out of the car, into the home, or for a walk in the park - some play MP3s, reflecting recent lifestyle shifts in the ways people listen to music.

The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Adrian McCoy is a staff writer for the Post-Gazette.



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