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Stern Vows He'll Rise Above FCC

The frustrated shock jock plans to move to nascent satellite radio starting in 2006.

October 07, 2004|Scott Collins | Times Staff Writer

Shock jock Howard Stern, whose raunchy antics have redefined talk radio while placing him at the center of a national debate on media indecency, told listeners Wednesday that he was abandoning traditional broadcasting for satellite radio -- a money-losing, unregulated, subscriber-only medium that reaches a fraction of his millions of listeners.

In an announcement heavy with his trademark immodesty, Stern, billing himself as "radio's biggest star," said his popular morning talk show would switch in January 2006, from Viacom Inc.'s Infinity Broadcasting to Sirius Satellite Radio, where the heavily fined broadcaster could at last escape Federal Communications Commission scrutiny.

With the new five-year deal, Stern, one of the nation's top three radio talk show hosts, becomes by far the best-known broadcast personality to migrate to satellite radio -- and the first with the potential to catapult it to mainstream popularity.

But the Sirius deal is fraught with risks for both sides. Stern, who has referred to himself as "the king of all media," is trading his vaunted broadcasting perch for a role at a niche "satcaster" with just 600,000 subscribers. The host, who reportedly earns $20 million a year at Infinity, could wind up a forgotten and isolated figure if large numbers of his core fans fail to follow him to satellite.

Money-losing Sirius, which along with its larger archrival XM Satellite Radio has struggled for listeners and financial stability, is betting heavily that Stern will bring 1 million new subscribers -- nearly tripling its current audience. Sirius will pay $100 million annually for Stern's show, which includes salaries for him and his crew as well as the costs of building a new studio and promoting the show.

Stern, 50, painted his move as an era-defining shift.

"I'm leaving radio -- this kind of radio -- and I'm going to the future of radio," Stern told his listeners. "I think radio the way we've done it is becoming obliterated."

The media landscape has been shifting beneath Stern's feet lately. In addition to fighting the indecency battles, he is attracting a much smaller audience than he did in his mid-1990s heyday. Stern's nationwide audience has slipped from an estimated 17.5 million in 1998 to 8.5 million this year, according to Talkers magazine, the trade journal of the talk radio industry.

Even so, his program is No. 1 in its time period in New York on Infinity's WXRK-FM and No. 1 in Los Angeles among English- language stations on KLSX-FM (97.1), Infinity spokeswoman Karen Mateo said.

In a telephone interview, Stern said his current predicament made it necessary to take a big risk.

"I got into the medium to change things, to be different, to be funny. And increasingly what's happened is that material I want to do on the air I can't do.... The rules are changing so rapidly and are so restrictive, especially for me."

Although Stern for some time has mused on-air about the allure of satellite radio, the timing of the deal took fans and industry observers by surprise, given that Stern still has more than 14 months left on his contract.

Signing a household name such as Stern could be a game changer for satellite radio, with the possibility of luring millions of new subscribers and boosting ad revenue. (Although the music channels on Sirius and XM are commercial-free, the talk, sports and news channels often are not.)

Sirius subscribers pay $12.95 a month for the service, which also requires a special receiver in the user's car or home. The company has partnership deals that put the receivers in new vehicles manufactured by DaimlerChrysler, Ford Motor and BMW.

With the Stern deal, Sirius "went from 'What's that?' to 'I want that,' " said Perry Michael Simon, an editor at radio trade journal AllAccess.com. Listeners who knew nothing about subscription radio "will go to Best Buy or Circuit City and ask for the one with Howard Stern."

Stern's exit is just the latest challenge facing the "terrestrial" radio business. Analysts say owners of large station groups have diluted the value of advertising time by cluttering programming lineups with too many commercials, driving away listeners and angering advertisers that believe that their messages are getting drowned out. Meanwhile, new technologies such as digital music players are threatening to erode listenership even further.

At the same time, satellite executives are snapping up marquee talent from across the spectrum; Bob Edwards, former host of National Public Radio's "Morning Edition," and shock jocks Opie & Anthony recently signed deals with XM.

"It's not a good picture" for conventional radio, said Richard Greenfield, an analyst at Fulcrum Global Partners.

The Sirius deal opens a new chapter in the stormy career of Stern, whose ribald antics have reshaped talk radio since he burst on the scene in the 1980s.

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