Could Howard Stern Be The Savior of Satellite Radio? 
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Written by Jerry Del Colliano Jr.   
Friday, 27 February 2004

The FCC, in a move clearly influenced by the Bush administration’s recent move to (even farther) right of center has been ruthlessly cracking down on what the administration calls “indecency in media”. The change in heart started by a national flashing by Janet Jackson has resulted in the CEOs of both Viacom (parent of CBS, MTV) and Clear Channel having to answer for their content to Congress.

A familiar target for the FCC is legendary and nationally syndicated morning talk radio star, Howard Stern. In this new climate of “indecency” Stern has recently been scolded by his boss, Mel Karmazin, recent off color comments relating to a supposed racial comment a caller made last week relating to both women and African Americans. Stern, whose side-kick is both black and a woman, often acts as a foil for his off-the-cuff comments even when in bad taste. As a result of Stern’s recent comments, Clear Channel, the largest owner of radio stations in America, also censured Stern by refusing to syndicate him for one day on all of their stations that normally broadcast his program. This action comes one day before Clear Channel’s CEO was headed to Capitol Hill to answer for their personalities shocking behavior including, but not limited to, Bubba The Love Sponge’s real life on-air execution of an actual pig. Bubba The Love Sponge, years after the slaying of a pig but only days before Clear Channel’s CEO John Hogan was to appear in front of Congress, was let go.

Politically, people in the middle of the spectrum tend to find Congress involvement in decency issues is unnecessary. The religious right voraciously disagrees and that seems to be the audience the current administration is courting in this election year. Democratic candidates are sure to make a big issue of what four more years of George W. Bush would be like in terms of loss of personal freedoms and freedom of speech with the current FCC and White House leadership. Indecency may quickly become a major topic in this year’s presidential election.

All of FCC chairman Michael Powell’s saber rattling has radio’s power base truly (and perhaps rightfully) scared. The FCC has implied that if radio (and even TV) doesn’t clean up its act right now, they may strip even the most mighty media companies of their broadcast licenses or at a minimum, impose more fines. Each infraction by a syndicated talent like Stern can mean cost $250,000 for each of his 40 stations adding up to a $10,000,000 FCC fine. A loss of a major market station license could mean billions of dollars in lost revenue and as much as $500,000,000 in losses for losing control of the radio station asset.

All of these FCC threats mean nothing to outspoken Howard Stern who now literally begs to be fired released from his contract on his show. He threatens that he will take his estimated 18,000,000 listeners to satellite radio and kiss Viacom goodbye. Stern’s importance is two fold for Viacom. He not only generates incredible revenue in syndication to clients like Clear Channel – he also serves as the main draw for Viacom’s vast network of male oriented, FM talk radio stations across the country. One would think they would do anything to save the “King of all Media” but that might not be the case.

Despite Stern’s power, it is not inconceivable to see him cut loose by Karmazin assuming Viacom started losing stations. In the event Stern was let go, the ramifications would be earth shattering. If Stern ended up on satellite radio he could change that media forever much like he defined the male demographic on terrestrial radio. Currently, satellite radio has about 1.3 million total subscribers with a little over 1,000,000 on XM and about 250,000 on competing Sirius. Even a tiny fraction of Stern’s 18,000,000 listeners could take a second place player like Sirius and turn them into the leader in satellite radio literally overnight. More importantly, with satellite radio’s subscription model each new listener equals profitability.

Perhaps the political climate will soon simmer down as a natural course of events? Maybe in a few months a new, more moderate American president could create a more harmonious environment in the entertainment business. One thing is for sure, the last guy John Hogan, Mel Karmazin, Michael Powell and especially George W. Bush want to tangle with is Howard Stern. While his content is (and has always been) a little off-color, his audience is wide reaching and highly powerful. He is the kind of catalyst who could inspire radical change whether it is on Pennsylvania Avenue or in the world of satellite radio.







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