Is Sirius radio nuts for paying $100M/year for Howard Stern?

[iversonyin]

Its all part of business. If you don't pay Stern, how are you going to get more subscribers?

This business requires exclusive deals to differentiate yourself. Otherwise, why get Sirius, why not go XM?

If $100mil a year get me those subscribers that would other wise not get Sirius or wouldve gotten XM. That $100mil is well worth the money.

 

[Vette73]

Originally posted by: Dunbar
Both XM and Sirius have commercials, but the rumor is Sirius will need more commercials to pay Stern's salary. And yes, I do think they are crazy for betting the house on one show. But if Rush Limbaugh gets 250mil there's some justice in the world that Stern gets twice that.

At least with stern he will be honest enough to tell you the majorioty of stuff that comes from his mouth is bs, Rush on the other hand. :Q


But yep. It sounds like a lot. But stern brings the listners. Do you think his radio station would have paid all those FCC fine and his salary if he did not? At least they and he does not have to worry about the republican run FCC now. 🙂

 

[rh71]

Originally posted by: diapickle
It's still crazy though, I had no idea people can make that much by talking on radio. Hell not even Oprah make that kind of money.

According to Forbes, Oprah made $224mil in 2004.

 

[Hacp]

Originally posted by: rh71

Originally posted by: diapickle
It's still crazy though, I had no idea people can make that much by talking on radio. Hell not even Oprah make that kind of money.

According to Forbes, Oprah made $224mil in 2004.

most of it through endoresements and stuff like that though. ABC doesn't pay Oprah that much money for the talk show.

 

[Red Dawn]

The idea is to get people interested in the service. You have to admit that the buzz about Stern coming to Sirius is great advertising. This is not only good for Sirius but XM too.

 

[Vette73]

Originally posted by: Hacp

Originally posted by: rh71

Originally posted by: diapickle
It's still crazy though, I had no idea people can make that much by talking on radio. Hell not even Oprah make that kind of money.

According to Forbes, Oprah made $224mil in 2004.

most of it through endoresements and stuff like that though. ABC doesn't pay Oprah that much money for the talk show.

ABC does not own or have the rights to Oprah. She is in syndacation. i.e. any station thats wants her just pays a fee and gets it. That why Oprah show can be on NBC, ABC, etc... In Wilmington NC Oprah is on the NBC channel and here in Raleigh/Cary NC area she is on ABC.

 

[Night201]

Originally posted by: Marlin1975
Also that 100Mill a year is not for stern but his company. I think that includes of course him and his show, but he also has to produce 2 other shows for them? maybe a stern fan knows more.

That is correct.

 

[Night201]

Originally posted by: C6FT7
He is crude. Good riddance. Perhaps they will go bankrupt. Sirius radio is :thumbsdown:

Don't mean you shouldn't get Sirius. Just don't listen to his channels

I think the Oxygen and Life Channel suck on cable - but I still subscribe - I just don't watch them.

 

[Night201]

Originally posted by: halik

Originally posted by: Cattlegod
last number i heard is they are up 1.3 million since stern's announcement, they needed 1 million to have it profitable.

Do the math, 3mil subscribers won't make them profitable. Most likely it will leave them with positive net cashflow. (financing 500mill over X years at Y% will get you $Z annual payments). It's just a fun accounting way of looking at things.

"I just bought a $1.2 mil house and if I get a 10% raise, I'll have money left over after the monthly payments.... though i'm still drowning in debt "

And you bought a 1.2 mil house why then?

 

[jpeyton]

Sirius is also banking on the fact that people will pay to hear Howard uncensored, which I am sure many people are.

 

[DrPizza]

Why would Howard need breaks? Given the level of humor his show operates at, they could simply put a few mics in the bathroom and his listeners can listen while he goes to the bathroom. Heck, he could even rub one out in the bathroom, for the listening pleasure of his fans, and they'll like it.

 

[JS80]

Solution: short sirius stock

 

[daveymark]

Originally posted by: DrPizza
Why would Howard need breaks? Given the level of humor his show operates at, they could simply put a few mics in the bathroom and his listeners can listen while he goes to the bathroom. Heck, he could even rub one out in the bathroom, for the listening pleasure of his fans, and they'll like it.

QFT

If I wanted to listen to farting and swear words, I'll give my dad a call - no need to pay $12/month to hear it

 

[rickn]

I like Stern, just not enough to pay for him

 

[ktehmok]

Originally posted by: rickn
I like Stern, just not enough to pay for him

You'd have to pay me to listen to him.

 

[DaiShan]

Originally posted by: iversonyin
Its all part of business. If you don't pay Stern, how are you going to get more subscribers?

This business requires exclusive deals to differentiate yourself. Otherwise, why get Sirius, why not go XM?

If $100mil a year get me those subscribers that would other wise not get Sirius or wouldve gotten XM. That $100mil is well worth the money.

Agreed. Product differentiation is a HUGE reason for price disparity for similar products. You have to make the consumer see a difference between your product and the competitions, and also make sure that the consumer values that differentiation.

 

[gabemcg]

Originally posted by: Agnostos Insania
Half a billion dollars for making potty jokes and talking to strippers. It boggles the mind.

I hope you are reffering to his $100M/year over 5 years, and you diddn't really think $100M= half a billion...

 

[OutHouse]

Originally posted by: Red Dawn
The idea is to get people interested in the service. You have to admit that the buzz about Stern coming to Sirius is great advertising. This is not only good for Sirius but XM too.

Yip, it would be interesting to know what the numbers are of people who said "wtf is sirius radio"

 

[spidey07]

as an aside (on business, gaining customers, etc) I never would have considered satellite radio. But XM was built into my car and they gave you a 1-2 month free trial.

talk about good marketing, I was hooked.

 

[OutHouse]

Originally posted by: gabemcg

Originally posted by: Agnostos Insania
Half a billion dollars for making potty jokes and talking to strippers. It boggles the mind.

I hope you are reffering to his $100M/year over 5 years, and you diddn't really think $100M= half a billion...

5 years X 100,000,000 = 500,000,000 = half-billion.

 

[DAGTA]

Number of signups doesn't tell the full story. How many of those signups stay longer than 6 months? How many stay longer than a year? Etc. Those numbers will be really important.

I tried XM radio earlier this year and cancelled it as soon as my 3 month trial was up. I found myself listening to the regular radio in Phoenix and CDs more than I used the XM.

 

[Lvis]

They will sell commercials, less than whats on his show now, though.

Howards leaving regular radio for Sirius has generated a ton of "Advertising" for them. Who knows what the dollar value of that is.

In the long run, it will pay off. Mel Karmazin is no dummy.

 

[BD2003]

Its basically a huge gamble. I remember hearing that stern alone would have to pull in 3 million subscribers himself just take break even. The market for satellite is competely split right now...it is absolutely inevitable that either xm or sirius folds eventually, since they are both bleeding money out of the ass. Sirius started out behind XM, and it will be a few years before it will be obvious whether or not the gamble has paid off.

 

[GreenGhost]

I already switched to yearly to monthly subscription. If the add commercials or start screwing up the radios I listened to most, I'll drop them. They will never be profitable if they are unreasonable. Besides, I was under the impression that die-hard Stern fans were not of the type that would pay for radio.