Stern On The Satellite

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Howard Stern is going to switch to satellite radio in 2006.

What does this do with overclocking or even computing? At first glance, not much. However, the situation with satellite radio very closely parallels the situation with the Internet and computer.

Mr. Stern is a content provider. He provides media, media that can be easily digitized.

Satellite radio has a few advantages over conventional radio similiar to that the Internet provides. Distribution is a lot easier (no local radio stations to have to deal with), and, at least currently, it’s free from the regulatory authority Mr. Stern has found so troublesome as of late.

The one big disadvantage satellite radio has over its ancestor is that now and for at least the near future, listeners will have to pay for a special radio to listen and then pay a monthly fee (currently $13 a month) to listen.

Stern fans are going to have to ask themselves, “How much is Howard worth to me? Is he worth $150 a year?”

The satellite radio company Mr. Stern has signed up with has guaranteed Howard and Company $500 million for five years. That’s quite a bit of money.

It’s estimated that Mr. Stern has about twelve million listeners. For this to be a decent deal for Sirius, they’re going to need at least a million Howard fans to pony up.

Will that happen?

It’s hard not to see parallels between this and P2Ping. The demographics between the two groups are similiar (Stern’s is probably a bit older and more male). The question is the same, though. Will people be willing to pay a monthly fee for something they’re used to getting for free?

Will they pay? Will they balk at paying and shift over to some other shock jock they can hear for free on the radio? Or will they hack satellite radios so as to hear Howard for free? If there’s a free feed on the Internet, will people listen to that instead, or what might they do if that becomes a pay-deal? Will we see a couple years from now the equivalent of RIAA lawsuits against those hacking Howard?

Keep in mind that if this deal doesn’t pay off, no more Howard, and likely no more Sirius. It isn’t like there will be alternative sources of revenue from the show (you can’t count on advertising revenues unless you have the bodies).

I think this bares close watching over the next few years because it will be a big, public demonstration on whether you can distribute digital content and actually make money from it.

Ed

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