Thursday, December 31, 2009

Howard Stern's New Contract: Lie #3 - Free Stations Can't Pay

One of the more amusing of the falsehoods widely being publicized is that Howard Stern can't expect to get a big paycheck if he decides to return to traditional broadcast radio once his contract with Sirius is up. This is because traditional broadcast ratings, and thus ad revenue, are down across the board. Here's the gist:

3. Free stations are also financially struggling and can't pay Howard Stern much. "The recession has compounded problems…" "radio advertising revenue fell…" "big station owners are wrestling with debts…"

Of course, the idiotcy of this argument is that traditional ratings are down because HOWARD STERN LEFT! Of course ratings are down across the board, Howard Stern was a huge draw to traditional radio. And if he came back, guess what, ratings would go up. Overnight. Howard proved that time and time again in every market he entered.

The disconnect in all this really has to come from some kind of anti-Howard Stern complex that defies logical thinking. When Howard was leaving for Sirius, traditional radio stations kept trying to pretend it was no big deal, that he was easily replaced. Once he left, the big national story became "Howard's audience shrunk." Well, of course it shrunk, he moved into a new technology where people had to pay for what had been free. And by all possible expectations, he did an unbelievable job at getting people to subscribe to Sirius (eventually wiping out his XM competitor in merger.)

Meanwhile, ratings at the old stations he left fell into the toilet. Not only during his time slot, but across the board because Howard's halo effect was gone. Somehow, this story of how Howard's departure from traditional radio demolished their ratings across the board has gotten lost. Reporters act as if this ratings decline is just a natural phenomena like the weather.

Yes, traditional radio does have more competition, like Howard on satellite and iPods, etc., but it is still a piece of technology that every person in America has in their car. All that needs to happen for someone to listen if for there to be something they want to listen too.

What is amazing is, in the four years since Howard left the traditional airwaves, no "new Howard" has emerged. No new unique talent has filled the gag he left, not even a mini-Howard or a Howard-lite. Every Howard replacement at every station he was on has tanked. This shows how special he was. There is a gapping hole in radio that only he can fill.

Once he fills it, ratings will go up. When ratings go up, ad revenue goes up. And that means money.

Traditional radio has plenty of ways of paying Howard as much as he could get from Sirius. (He could just take a huge cut of ad revenue.) In fact, Howard is likely to get a lot more money than before if he goes back to traditional radio, because it's so clear that they screwed up by letting him leave to begin with. Traditional radio needs him bad. And trust me, they would pay a lot to get him to return. They might not say it publicly, but privately their are huge offers.

The only question is whether or not Howard is interested.

Wednesday, December 30, 2009

Howard Stern's New Contract: Lie #2 - Because of Merger Howard Has Less Negotiating Power

Okay, back to the anti-Howard conspiracy. The second argument that Howard has to take a big pay cut or retire is:

2. Because of the merger, Howard doesn't have any competing satellite network to go to. Since Sirius absorbed XM it has been reducing "on-air talent costs."

This argument is based on the incorrect assumption that the only reason Howard got his reported 500 million dollar Sirius deal is that XM and Sirius were in some kind of crazy bidding war in the early days of satellite radio and Howard got overpaid.

The truth is, XM was never that hot on Howard to begin with, and never would have paid Howard anything close to what he got at Sirius. As I pointed out in my previous post, back in 2004 XM was in the drivers seat, with millions more subscribers than Sirius and better car deals. No one could have predicted at the time (even the most rapid Howard Stern fan) that Howard's move to Sirius would bring millions of subscribers over night and end up with XM having to merge under Sirius. Howard basically wiped out XM's lead in a few short years.

But doesn't the merger still mean one less potential buyer? Not really. What Howard proved in his move to Sirius is that he is a new media game changer. His fan base is so strong, his exclusive presence is enough to kickstart a delivery platform, in this case Sirius satellite subscriber radio.

The biggest problem satellite radio has right now is that because of rapid advances in technology satellite radio isn't such an amazing thing anymore. It's kind of nice, but not really the must have it was supposed to be. The reason the government allowed the merger was because there are many new delivery platforms rising to compete with it. In particular, car iPods and car equipped wi-fi. Moreover, coming up on the horizon is wi-max, which has even broader uses than wi-fi. It's hard to imagine why anyone with a car with complete internet access would need satellite radio in addition. Other than to get exclusive content like Howard Stern. Stern is actually more important now to Sirius BECAUSE OF THE MERGER. Because the merger was only allowed because of the competition looming on the horizon.

Back in 2004, Howard really had only three options: traditional broadcast radio, that wanted to censor him, XM that didn't really want him badly, and Sirius that wanted him very badly. Howard made the correct choice. But thanks to that deal, Howard proved what an incredible draw he is by allowing Sirius to rapidly grow a huge paid subscriber base.

Today, Howard still has the choice to go back to traditional radio, he has the choice to stay at Sirius, but, having proven his value, he could launch any variety of new broadcast channels, over the internet, over cell phones, X-Box, over wi-fi and wi-max networks. He has more choices today than ever, and unlike years ago, a proven track record of bringing in paid subscribers.

Remember, the big story five years ago was "will people pay for Howard?" The answer, without a doubt now, is yes. Sirius originally paid for Howard as a kind of lost leader. He was supposed to deliver a million subscribers and drum up publicity. He instead turned out to be a cash cow, delivering at least four million listeners over a five year period. Those listeners would follow him to almost any new media platform.

Just a quick example: Microsoft's Zune has not been able to crack any market share compared to the iPod. Yet there's nothing really wrong with it's technology, people just prefer the iPod. If Microsoft was to offer a deal where Zune users could get exclusive free Howard Stern, it would be huge. They could also get it on their X-Box's. Such a deal could put the Zune in business. And Microsoft has deep pockets.

Those kinds of choices, and there are many of them, give Howard huge leverage in any new Sirius deal. Even if Howard didn't have the choice of breaking out new technology, the real competition for the original Sirius deal, traditional broadcast radio, still needs and wants Howard. Sirius paid Howard a lot of money because he was already making a lot of money in broadcast radio. Howard still has that option too, as we'll explore in our next post on Lie #3:

3. Free stations are also financially struggling and can't pay Howard Stern much. "The recession has compounded problems…" "radio advertising revenue fell…" "big station owners are wrestling with debts…"

This argument is also complete bullshit. Stay tuned…

Tuesday, December 29, 2009

Sirius Still Promoting Howard Stern Like He's Staying Forever

Before we move on to the Howard Stern new contract conspiracy lie number 2, here's a quick piece in an on-line radio trade publication that correctly points out that Sirius/XM is still promoting Howard like he's going to stay.


Monday, December 28, 2009

Howard Stern's New Contract: Lie #1 - Sirius Can't Afford to Pay

As I reported in my last post, AP ran a story, blindly repeated as "news" everywhere, to explain why Howard Stern has little choice but to re-sign with Sirius/XM for seriously reduced pay when his contract expires next year. It focused on five key talking points that became a framework for every other "news" story about Howard's negotiations since. Not only are these five points incorrect and based on faulty logic but in every case the opposite is true.

Over the next week, I'll address these points one by one and show why they are wrong. Howard, today, is in a stronger negotiating position than at any time in his long, popular and profitable career. Let's begin with the first point.

1. Sirius can't afford to pay Howard what it used to. "Sirius nearly had to file for bankruptcy…" "weak auto sales…" "threats from internet radio" etc.

Sirius was actually in a worse position to pay Howard when it first signed him in 2004. At the time, Sirius had just 300,000 subscribers. It was losing money like crazy, and it was completely unclear whether people would pay for satellite radio. Moreover, if people would, it was more likely XM radio would be the winner of any competition. XM had better technology, better deals with car manufactures and several million more subscribers (before Howard).

Howard completely changed the game. Under Howard's original deal, all he had to do was bring in 1 million subscribers to get a huge bonus. Howard brought in 4 million. And then a couple million more and counting. XM rapidly lost market share as Sirius gained it. XM finally was forced to merge with Sirius when both companies hit about 9 million subscribers.

Now, the combined satellite company (run by the people who hired Howard) has 18 million subscribers. It has no competition. It's clear that people will pay for satellite radio.

Yes, it has a lot of debt (as did Sirius before it signed Howard). Yes, it's stock is in the tank (as Sirius was before it signed Howard). Yes, it's still not showing a profit (as it did before Sirius signed Howard). But the combined entity is in a much stronger financial position that it ever has been. It has a serious deep pocketed investor (Liberty Media) and tons of income. Debt can be moved around, pushed and compartmentalized.

Eighteen million people paying 20 bucks a month or more is $360 million a year. Trust me, there's plenty of money in that company to pay Howard. If they think he's worth it.

Is he? Well, Sirius/XM's main problem is it's stock price. After signing Howard in 2004, Sirius stock jumped and continued to rise as Howard publicized his move and into his first year. Gradually, after Howard stopped his publicity campaign (and after Howard sold most of his stock), the stock began to fell. But Howard had already lived up to his part of the deal. He brought in at least 4 times as many subscribers as he promised. A major new publicity campaign by a re-signed Howard could do a lot for Sirius/XM stock.

Losing Howard, would be a disaster. He's about the only good move, other than the merger, the companies have made. Don't get me wrong, Sirius/XM is not in great shape, but that's not because of Howard. It's hardware has always been second rate, it probably charges too much, and it's choices of programming, other than Howard, has been marginal to horrible.

Howard is not only the top rated draw on Sirius, but his programing is rated twice that of any other station on the channels. The second station? Music hits. Sports have not be a big success for satellite radio, or news, or other talk. They have Howard and non-commercial music and that's about it as far as what listeners are listening too.

Losing Howard would be suicide at this time for Sirius/XM. Liberty Media didn't make a huge investment in Sirius just to see it collapse, and 360 million a year in income isn't something that should be thrown away because you can't afford your main draw. Would Sirius rather pay Howard less? Sure. But there's no reason for Howard to take a pay cut just because they've overpaid for other programming no one listens too.

Sirius not only needs Howard, it needs a happy Howard. A Howard that will go on a major push to promote a revitalized, merged, and on the rise Sirius/XM. Howard is worth hundreds of millions in publicity, as he already proved at the beginning of his deal with Sirius.

NEXT UP: We explore the next pile of bullshit:

2. Because of the merger, Howard doesn't have any competing satellite network to go to. Since Sirius absorbed XM it has been reducing "on-air talent costs" and can force Howard to take a pay cut.

STAY TUNED

Sunday, December 27, 2009

Will Howard Stern Take a Big Pay Cut to Stay at Sirius? The Kiddy Blocks of A Fake News Story

Various paid corporate flacks are flooding the internet with thinly disguised psyops against Howard Stern. The message they are trying to get out, and trying hard, is that Howard has no choice but to resign with Sirius/XM, at a lower rate of pay, when his five year contract runs out next year. Here's the basic templet created by Associated Press that is being repeated:

AP Stern's Threat to Quit Sirius Could be Empty Talk

It carefully crafts the main talking points being variously repeated everywhere without question.

1. Sirius can't afford to pay Howard what it used to. "Sirius nearly had to file for bankruptcy…" "weak auto sales…" "threats from internet radio" etc.

2. Because of the merger, Howard doesn't have any competing satellite network to go to. Since Sirius absorbed XM it has been reducing "on-air talent costs."

3. Free stations are also financially struggling and can't pay him much. "The recession has compounded problems…" "radio advertising revenue fell…" "big station owners are wrestling with debts…"

4. He wouldn't want to go to free stations because of the FCC. He likely would "chafe at being censored again…" "his racy banter isn't subject to federal restrictions…"

5. He can't retire because he loves the publicity. "he won't give up his bull horn."

All of these points are completely wrong. AP does allow that Howard has some options, but the main gist of the story is patently stupid. It is only supported by quotes from talking heads with vested interests in seeing Howard fail or old grudges against him. I mean, come on, they quote Opie & Anthony's (two barely successful Howard Stern wannabes) agent when he says, Stern is "probably not worth" 500 million to Sirius now. Who gives a shit what he thinks?

Another key source is Brett Harriss who represents a company that owns 1.1 million Sirius shares and for some reason thinks Howard should take a pay cut and keep working. Hmm… that's an objective point of view.

After AP helpful set up the talking points, they're being repeated as facts elsewhere without even a shred of new information or counterbalance. For example:

Boston Herald

It breathlessly runs through the five points: "… experts say Stern doesn’t have many places left to go if he wants another huge payday. Free radio stations are struggling with steep drops in advertising and high debt loads, and probably can’t pay top dollar to get him back. Not to mention the fact that Stern would need to clean up his act or do battle with the FCC again. So if Stern, 55, does re-sign with Sirius - which declared bankruptcy this past year - it’s likely to be for a much leaner paycheck this time around." Almost like it's afraid someone will interrupt. Of course, no mention of who all these experts are. Opie & Anthony's agent?

Here's breaking news from the Sacrmento Bee"

Sacramento Bee

"Not many places left that can pay him big bucks. Free radio stations are struggling with declines in advertising revenue and hefty debt. There's only one satellite radio operator left, and he's already on it." Talk about great investigative reporting!

Here's so more examples. Play Where's Waldo and find the five talking points in each of them:

Minneapolis Star Tribune

Examiner Thinks Howard Will Be Dethroned

Monsters and Critics

Canada Thinks Howard Should Take a Pay Cut

Canada Again

Stupid Gossip Blog

Paris Hilton? Traitor!

Howard Isn't Even Funny

So whose behind this endlessly repeated bullshit? Well, obviously some people like reps for Sirius shareholders, have a vested interest in Howard thinking he has no choices and taking a pay cut. Others, like the agents of other radio hosts, might just be bitter and love to be quoted. Some of this is coming from inside Sirius, but also some of it is coming from free radio stations who would love to have Howard back and are hoping Sirius is too stupid to pay him enough to keep him.

Now, plenty of poorly researched news stories are repeated all over the internet because they cover an interesting topic (in this case Howard Stern) and people are too lazy to do any real reporting. But there clearly is a conspiracy going on in this particular case, because you don't have to do any work to write about Howard Stern. He's on the air four hours a day! Why not quote at least something HE SAID. Yes, he's not saying a lot, wanting to keep the negotiations private, but what he is saying is a hell of a lot more interesting that repeating crap.

Plus, as I will show in later blogs, there are a lot more facts easily available that contradict all five of these points than there are to support it.

Finally, why not quote the guy who is actually negotiating the deal? Here's what he says:

What Does Mel Say?

"… my business model is always that I'd rather figure out a way to make money with the talent rather than not have them and compete against them."

That seems to make a lot of sense. That kind of thinking means there will be a lot to negotiate and there are plenty of ways to make Howard happy. Stay tuned.

Thursday, December 24, 2009

The Best of Howard Stern is Now

This holiday the "History of Howard Stern," a wonderful radio documentary on Howard Stern's career has been playing on Sirius XM in heavy rotation. It has terrific clips from his decades long rise to fame and fortune.

It's been fun to listen too, but it got me thinking about how amazing his show is right now. Howard's program has always been great listening, but his last few years on Sirius I think have been his best yet. I never was a huge Jackie fan, and I think Artie is a heck of a lot more funny and interesting. Even when he can't show up, he makes for great backstage drama. Howard's cast of supporting characters and wackpackers is great as ever and the technical values have never been better.

But Howard himself seems better, more relaxed, more in control. Free of censorship he really is able to just be himself and let the show be what it's supposed to be. While much has been made of how Howard needs an enemy (usually the FCC) to fight against, I actually enjoy the show the most when he can just do what he wants and seems to be having fun.

The first year he was on Sirius the show almost got a little too X-Rated as Howard and the others tested the bounds of what they could do. But now it's settled into just an honestly funny show, that can jump in and out of X-Rated, R-Rated or G-Rated material without any hesitation. It feels like a natural conversation between very witty friends.

Right here, right now, is the place where I want to listen to Howard. Let's hope he decides to continue for many years to come.

Monday, December 21, 2009

Welcome to Howard Stern Seriously

Welcome to the "Howard Stern Seriously" blog which is taking on the torch from the infamous old "Howard Seriously" blog. I'm Mackay Bell, a life long Howard Stern fan, and I can't think of a more interesting time to take over this blog. Howard's new contract negotiations/possible retirement are going to provide a lot of interesting topics over the next year. This blog focuses more on the business and artistic side of Howard. We don't go for a lot of gossip or just fandom stuff. We take Howard very seriously as we know he takes his art very seriously. Even if it involves fart jokes.

So let's get started. Howard's contract is up next year and already Sirius is planting news stories trying to get him to take a big pay cut. Howard is an artist who is truly capable of doing anything, radio, film, television, music, but for some reason people keep trying to tell him that he has no choice but to do whatever it is his current bosses want. Here's a link to a planted story with planted anti-Howard talking points:


Now Howard himself is a little to blame for the bad press that talks about his lack of choices and need to settle for less. That's because Howard, and his Super Agent Don Buchwald, are old school and don't talk about their business in public. At least as much as they can given Howard's fans are rabid for any information they can get. So there's always a bit of a Howard new vacuum and that others can fill. Others like his current and former bosses. And like most bosses, they have one message they like to send out. Work more for less money.

But Howard has tons of choices, and he knows it. If he wants money, he can get it. If he wants power or fame, he can get it. If he wants a prime time show for Ronnie the Limo Driver, he can get it. And don't think that Super Agent Don Buchwald isn't exploring the entire range of Howard's choices and informing Sirius how screwed it will be if Howard leaves. This should make for a very interesting drama in the year ahead. Hope you enjoy my commentary!

Oh, and if you want to check out some of the postings on the old blog, do it soon. It will all be taken down soon. Here's the link: