Transcript
BOB GARFIELD: This week the self-proclaimed King of All Media, Howard Stern, announced that in 2006, when his contract is up, he'll be leaving Infinity Broadcasting. In fact, he'll be leaving terrestrial broadcasting all together and taking his act to Sirius Satellite Radio, where he and his team will earn a hundred million dollars a year for five years. [START TAPE]
HOWARD STERN: I think I have more of a future there than I do here. And I'm, and I'm betting that people are going to come with me. And the stock market certainly reflected it. And-- I think this is just the beginning of the avalanche. [TAPE ENDS]
BOB GARFIELD: Stern has long threatened to take his show and put it where the FCC don't fine, but if his legions of listeners follow him, satellite radio may start doing some real business, and the radio landscape could be forever changed. Grandiose, but fair to say. Scott McKenzie joins me to weigh in. He's editor in chief of Billboard's Radio Monitor. Scott, welcome to OTM.
SCOTT McKENZIE: Thanks, Bob.
BOB GARFIELD: All right. So Bob Edwards gets demoted by NPR and signs on with XM. Shock jocks Opie and Anthony get fired for a repulsive sex stunt in St. Patrick's Cathedral and get hired by XM Satellite Radio. And now, after getting his syndicated show fined into submission, Howard Stern and his gang get a hundred million dollars to jump to Sirius Satellite Radio. Would someone fine me or fire me, please, because all this steady employment does seem to be costing me some very big money.
SCOTT McKENZIE: [LAUGHS] Welcome to the FCC-free zone.
BOB GARFIELD: [LAUGHS] What, what's happening here?
SCOTT McKENZIE: What's happening is, a shift in radio as we know it. I think Howard has very much been pushing this bandwagon for a while. He's expressed his concern about the FCC pushing him towards this, but I think it's also about money and it's also about a, a new direction for radio that is now starting to get some fairly serious momentum. What Stern brings to the table is the most loyal fan base in radio, with perhaps the exception of Rush Limbaugh, though Stern's audience is that male that's 18 to 49 that all the advertisers so desire. So he's very much pushing and hoping that, in that push, he takes along the millions of people that listen to him.
BOB GARFIELD: Well, let's just make clear the, the differences between terrestrial radio that we're all accustomed to and the new technology. First, there's the technical one of course -- that it's beamed by satellite and you don't have to be near any local antenna. You can get the same programming from coast to coast. But from a programming point of view, the comparison has been made to the difference between broadcast TV and cable.
SCOTT McKENZIE: Yes. I think that's a, a fair comparison. They're subscription-based, for the most part, and both areas are FCC-free zones. There is no mandate the FCC has to have oversight of either satellite broadcasts or cable television.
BOB GARFIELD: So if Howard Stern wishes to interview strippers, he can do that to his heart's content. If he wants to use naughty language, he can do that. If he wants to use bathroom talk, he can do that.
SCOTT McKENZIE: Absolutely. And now, he can do it in every market in the country. Places like Atlanta have never Howard on the air, and now they will have that opportunity.
BOB GARFIELD: Well, congratulations to the people of Atlanta. Infinity, which is Stern's current employer and will be his employer through the year 2005, has said that it wouldn't even think of trying to compete for Stern's services at these rates. If Infinity couldn't imagine coming up with a hundred million dollars to pay Stern and his crew, how can Sirius Satellite Radio afford to do it? This was a company in deep trouble.
SCOTT McKENZIE: Sirius owes a lot of money. Stern, on the air, acknowledged that point to say, look it's a long way from making profit. But what Sirius is banking on is a, a longer-term gain. Their stock price jumped about 15 percent on the news of the Stern signing. They've been working very closely with the auto makers to make sure that, that Sirius' devices are installed in cars, and in some cases, subscriptions are being given away for, for a year for free, in the hope that they can get people hooked.
BOB GARFIELD: Someone -- I think it was the Associated Press -- compared Stern's signing with Sirius to Joe Namath, in I think 1960, signing with the fledgling American Football League, giving that league instant credibility and a shot at a TV contract. Do you think that's a fair comparison here?
SCOTT McKENZIE: I think a, a comparison that perhaps fits in the radio world is Scott Muni, who died recently -- one of the great rock deejays of his time. He started out on AM radio, and there was really nothing else in the space at that time, until FM started to edge in, and started to become available in cars.
BOB GARFIELD: Muni moved over to FM, as a pioneer.
SCOTT McKENZIE: Yeah. The FM affiliates were always the second cousins and never making the sort of money that the AMs were. Of course, we know historically that people began to buy cars with FM radios, and that the FMs became the cash cows of, of radio. I think that's at least a glimpse of what we're seeing with the satellite providers now. Whether that becomes as big as the FM bandwagon became is something that remains to be seen. There's still a lot of questions as to whether two satellite providers can continue to operate in the space or whether there needs to be some consolidation.
BOB GARFIELD: Scott, thanks so much.
SCOTT McKENZIE: Thanks, Bob. Much appreciated.
BOB GARFIELD: Scott McKenzie is editor in chief of Billboard's Radio Monitor, and he joined me from San Diego where he's attending the National Association of Broadcasters' Radio Convention. [MUSIC]