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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Comments on “Comparing Terrestrial Radio Apples To Satellite Radio Oranges”

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16 Comments
Doc Searls (user link) says:

Howard Stern on satellite vs. terrestrial radio

Several additional points worth making.

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.

Anonymous Coward says:

Re: Howard Stern on satellite vs. terrestrial radi

he didn’t increase the sirius subscriptions by the millions. everyone who gives him credit for *every* subscription after he signed on is out of their mind.

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.

Squidly says:

Tired of Adverts

I’m not a Howard fan; never have been (and I have listened to him on occasion to see what his show is like). I do respect and tend to agree with his decisions to leave Terrestrial Radio.

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).

Jo Mamma says:

Satellite radio will be effectively dead in 10 yea

Satellite radio as a business model doesn’t seem to work. It doesn’t make money.

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.

leroy says:

Ads on XM

I know there are deceptive statements online and in print that still refer to XM as not having ads. Truth is, that aside from some music channels, most of XM is ripe with ads. There are no uninterrupted music channels on XM! And the channels with ads feature spots for the same things you see in your email spam (viagra, get rich quick, buy houses with no money down, consumer credit services, be your own boss – drive an 18 wheeler, etc.) Plus, the sound quality of XM is very poor, sounding like mid-1990’s internet “radio”.
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

P Ness says:

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

____________________
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?

Sanguine Dream says:

Some ad breaks are good...

When I watch tv and on the rare occasion I like to terrestrial radio (I only live like 1 ml from work so I mean VERY rarely) I don’t mind the occasional break. DJs and host/hostesses need breaks. And even with tv I understand that ads are necessary. It’s when a tv network will preempt the closing credits of a show to play ads that it started bothering me. Remember years ago when you could actually listen to the music of your show’s closing credits?

ScytheNoire says:

but...

here’s what i’m not getting. CBS Radio, or at least the station i listen to in Detroit on FreeFM, is some how conected with CBS radio. well, we know how well the Stern replacement in David Lee Roth worked out. ya, big corporate stupidity. now for a while there was a show i thought was better than Stern in Rover’s Morning Glory, but the Detroit and some other places canned Rover in favor of this new old show, Opie and Anthony.

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.

NIghtowl007 says:

Stern is just a bonus

Satellite radio, even without Stern, is worth the money.

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.

Howard_Sucks says:

Howard_is_God

I’m am not 100% sure I read the article correctly, but it sounded to me that it was about ad rates on Sirius Sattelite Radio, specifically on the Howard Stern show. What does whether or not you like Howard, Opie and Anthony, or hate both have to do with that??? What does the lack of commercials on the music channels on XM have to do with that???

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…

Galen (user link) says:

All of this doubt about satellite radio absolutely reeks of everything that was said about FM radio when it first emerged. When DJs left AM for FM, they were crticized as well. In Howard’s own words: “Satellite radio WILL be the dominant medium.” The FCC has killed terrestrial radio. People are fed up with it.

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.

Imperialmascot says:

You satellite radio bashers are dumb, Sirius is the best investment I have ever made. I have variety that pinpoints my interests. Hmmm, maybe listen to Howard, maybe Alt Rock, maybe 70’s rock, maybe hard rock, maybe punk rock, maybe 90’s grunge, maybe any 90’s, maybe sportscenter, maybe nfl talk, maybe anything I want, I am not at the mercy of a good signal and a good DJ on my one favorite station on the primitive terrestrial Radio. As for Howard, good move, very good move, Satellite Radio is the future.

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