Comparing Terrestrial Radio Apples To Satellite Radio Oranges
from the try,-try-again dept
There's been plenty of talk concerning how successful (or not) Howard Stern's move from terrestrial radio to satellite radio has been. However, a former TV exec now working for News.com appears to be gloating over the fact that Stern can't command the same ad revenue per commercial spot as he did on terrestrial radio any more, noting that Stern's smaller audience on Sirius means his ad rates are about one-third of what they used to be. Apparently, this means his "value" has dropped. That's not an accurate comparison however. Stern's listeners also pay a nice sum in subscription fees in order to hear him -- and you have to imagine that replaces a lot of the missing ad revenue. While the original article about Stern's ad rates focus on the problems in actually counting listeners on satellite radio, the real issue is that you can't do a straight-up comparison of audience size or ad revenue per 30-second spot. The subscription fee upfront changes the equation, and any comparison needs to take that into account. What is true, however, is that the dollar value of commercials on Stern's show has dropped since the show first launched on Sirius -- but that could have something to do with a premium being paid for ads when the show first launched and got so much attention. Either way, this does highlight an issue that both broadcasters and advertisers need to understand. You can't just do a straight comparison of different types of programming any more, and need to take into account various other factors as well.
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Howard Stern on satellite vs. terrestrial radio
One is that Howard's show is 100 times better now on Sirius than it ever was on terrestrial radio, and it was a good and groundbreaking show then.
Another is that Howard has increased Sirius subscriptions by the millions.
Another is that terrestrial commercial radio has, for various regulatory and economic reasons, gone to hell.
I have my problems with satellite radio (mostly that they are corporate silos), but they offer far more now than most commercial terrestrial radio has in many years. It is worth the money and effort for subscribers. And if that works financially, even given the large sum paid to Howard, more power to him, and to the whole medium.
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Tired of Adverts
I really must say that I'm glad I'm using Sirius for the one and only reason that I speculate most of us Satellite Radio Subscribers use Sirius or XM...
WE HATE ADVERTISEMENTS!!
I've completely stopped listening to Terrestrial only because I can't stand being berated and belittled by numerous ads every 7-10 minutes (or 3-4 songs).
And the fact that I can pause, rewind, and skip forward through commercial free music is awesome! This feature alone must have the RIAA's panties in a serious bunch (no pun intended).
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Satellite radio will be effectively dead in 10 yea
It will be quickly obsolescent by the emerging technologies, such as Wi-MAX, which can offer "radio" from anywhere on the planet (granted HEARING anywhere on the planet will take some time). You think your local radio station is getting online and streaming just for us local folk?
People criticized Stern for cashing out his stock immediately, but I think he was smart (outside the ethical problems with that, of course). I think he'll likely ride the wave until satellite radio goes under, then retire filthy freakin' rich.
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Ads on XM
While I have never heard sirius or howard stern, I think eventually the two XM and Sirius will merge to survive because any service selling ads for viagra pills cannot be doing well financially. Long term, satellite radio will survive, but the model will need to change. I think Stern is probably an asset to the concept of satellite radio as a business, I would never listen to him.
L
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____________________
Well the estimates on that report put the subs at 2.7m (listerners 5m+).
2.7m x $10 bucks per sub x 12 months x 5 years = $1.6 BILLION.
His contract $500m
So that leaves 1.1b over 5 years = $220m - expenses/aqusition cost per year..
I just don't see how this is bad news?
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Re: Howard Stern on satellite vs. terrestrial radi
howard just doesn't carry the same weight he used to. personally, i think he chose the wrong satellite company due to pure greed. he went to a smaller audience than was available to him.
XM *does* have commercials during talk shows. normally due to the people actually needing breaks. though, i know with O&A, they have one significant commercial break and then during the others, they just play repeats instead of commercials. the music channels have a LOT LESS commercials then terrestrial radio. SO much less. When there's a break, its usually to say the name of the station. Or just to advertise another channel. But thats it, one 30 second break every fifteen to thirty minutes. That's fine with me. better than a 5 minute commercial break every 10 minutes.
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Some ad breaks are good...
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but...
Opie and Anthony has to be THE WORST radio show that has ever went on the network, at least that i've listened to. David Lee Roth might have been worse, but it would be close. another CBS Radio blunder.
but what i don't get is, this Opie and Anthony, who are the worst morning show i've heard, are advertising XM Radio constantly. what the hell is with this? when Stern was around he couldn't mention any satelite radio companies, but now on the same station they are advertising XM Radio constantly. that is so screwed up.
at least it's on a horrid show, since i can't see Opie and Anthony being on for much longer, i hope. it's just a horrid show, worst ever. CBS Radio is run by complete morons.
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Stern is just a bonus
Personally I am very, very pleased with what I get for the money per month. It is well worth it not to have to deal with the freaking commercials.
And, since I travel alot, it is worth it to hear the same channels wherever I am and not have to be scanning the dial looking for something to listen to.
Don't get me wrong, I am very happy to listen to Howard 101 every day and the show, if you are a fan, has really taken a step forward. The recent all-request Labor Day weekend was phenomenal with the old bits (uncensored) from his terrestrial days. It was nice reliving those bits in this new medium.
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Howard_is_God
I know. I know. Howard brought 5 million subscribers to Sirius, even though they only have 4.7 million subs including the Hyundais still sitting on car lots. Everyone is lying about ad rates, because he is demanding more for ads now than he ever was on terrestrial radio because he brought the whole world with him.
"Take it for what its worth, stern said this morning that the high end of those rate quotes were made during the DotCom era, the last two years of his radio contract his rates were more in line with what is mentioned in this article and what he gets today on sirius"
More "Howie math"
On to my point...
How can ANYONE expect to have larger ad revenue with a smaller audience? If you took CNN and removed it from all of the homes with cable in America and put it on some AM radio station in Toad Suck Ferry, Arkansas, would the commercials sell for the same amount they did before? Why would you make such a comparison? Why is this news?
Next compare my Jaguar to my favorite chair in front of my TV...
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um, if you're a DJ, isnt that called playing a song??
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What has Stern done for Sirius? They had 600,000 subscribers before he came on board. Now they're closing in on 6m. That's an increase of TEN TIMES in a year. No, surely that had nothing to do with the most famous radio personality EVER jumping on board with them...
Ad revenue??? Who cares?! Howard apparently doesn't. Satellite radio is not all about the ads like terrestrial radio.
Not a good business model? Riiight, and satellite TV isn't a good business model either. Are you KIDDING me? You have people paying to listen to your service; how is that NOT a good business model in any universe?
It's GREAT and what I'm reading here is a few people who can't seem to wrap their heads around the future. Just like "FM radio will never amount to anything." Get with the times, people.
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