November 29, 2015

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12/05/05 The Stern Factor

Shock waves rippled though the radio industry when Howard Stern announced his decision to move to Sirius Satellite Radio. I remember the day clearly. I was in a meeting with many radio leaders and I watched some of them turn white as sheets when the news hit. One put his head in his hands and said, “This is a PR nightmare.”

With the new year comes a moment as significant as when Milton Berle or Jack Benny made the leap from radio to television. At the time, critics said the new medium of television would not be a success and the talent leaving radio would eventually return to radio when television failed. They said the same about FM, and they are saying it about XM and Sirius.

My unpopular stance is that XM and Sirius will be wildly successful - and their success will boost the success of terrestrial radio. It's been proven in other places like England when local broadcasters fought national radio. Turns out all radio benefited when national radio brought newfound attention and interest to local radio. Radio will benefit from their success.

Stern's move is a big loss for terrestrial radio and a huge financial hit for Infinity. Let's admit it and move on instead of pretending it will fail. My guess is that Stern decided to leave when radio failed to confront the FCC to protect our First Amendment rights. Though there is a lot I would rather not hear on the radio, I will defend those rights. Sadly, no one in radio seems to have the guts to appear politically incorrect, and to fight.

The question remains whether Stern will move his massive audience to Sirius. My bet is that he will convert a significant portion. Certainly some of Stern's success was based on his getting away with things on the radio and spitting in the eye of the FCC. Will the loss of that mystique impact listening when he can say explicitly what he wants? Probably not.

The good news for radio is that satellite broadcasters are raising the bar. XM is promoting Ellen DeGeneres, Snoop, and other prominent celebs as deejays. Both networks are offering new creative programming solutions those of us on the terrestrial side have not considered. I applaud their willingness to take risks. If we terrestrial broadcasters see some success with the Satellite broadcasters, maybe we will finally take more risks.

Stern receives much criticism for his content, but as a broadcaster he deserves credit for shaking up the industry, bringing listeners to the dial, fighting the FCC on important speech issues, and raising the bar. Ultimately, the Stern factor will be good for radio no matter what the outcome.

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