Bill Virgin's Radio Beat December 7, 2006

Includes archive of Bill Virgin's columns fromJ une 2006 - March 2009

Postby radiofan » Wed Dec 06, 2006 6:54 pm

Thursday, December 7, 2006

On Radio: Effects of Stern's defection to satellite radio fall short of forecasts

By BILL VIRGIN
P-I REPORTER


A year ago the radio industry -- or at least that part of the industry constituted by traditional AM and FM broadcasters -- nervously awaited the defection of its best-known star to a competing service and what that meant for the long-term survival of its business.

Not only was the move by nationally syndicated shock-jock Howard Stern to Sirius expected to spur the talk host's fans to sign up for the satellite service, it also was expected to accelerate the long-term erosion of traditional (or "terrestrial") radio to competitors including personal music devices and the Internet.

And a year later?

Terrestrial radio still has plenty of challenges and questions about where its audience is going. But satellite radio has plenty of questions of its own about recruiting and keeping customers.

Earlier this week, Sirius announced that it is lowering its estimate of year-end customer counts to between 5.9 million and 6.1 million, down from an earlier prediction of 6.3 million.

"Last year with Howard Stern's move to Sirius rapidly approaching, we added 500,000 subscribers in the last 10 days of the year, representing nearly 25 percent of the year's net additions and clearly demonstrating the dramatic pace of holiday sales," said the statement from Sirius Chief Executive Mel Karmazin. "While strong, this year's retail sales results since the Thanksgiving weekend have not been at the pace we had anticipated."

Karmazin said subscriber growth will still be ahead of 2005, and that the company still expects to be cash-flow positive soon, but investors were unimpressed, shaving nearly 8 percent off Sirius' stock in one day of trading.

Like cable television, satellite radio's chief selling point is greater selection of programming in sports, talk and music than can be found on local stations. Like cable television, satellite radio isn't free. In addition to the equipment costs, Sirius costs $12.95 a month.

A big boost to both Sirius and competitor XM has been the agreements each has signed with auto manufacturers for installation of satellite-radio units, often accompanied by a complementary service period for purchasers of new cars. A continuing question about the future of satellite radio is how many of those car buyers will sign up for the service when the trial period expires. A Sirius spokesman says that what it calls the conversion rate has been between 52 and 56 percent, depending on the auto brand. Sirius' third-quarter earnings release said its average monthly churn rate -- the number of customers who drop the service) for the full year is expected to be 1.8 percent.

XM, meanwhile, has announced that General Motors plans to add its radios in 1.8 million cars next year, with Honda including its radios in more than 650,000 vehicles.

Another long-term question about Sirius and XM is whether the two might merge. That issue was raised again this week when Federal Communications Commission member Robert McDowell was asked about it at an investor conference. McDowell called the idea "intriguing," according to the Hollywood Reporter.

In other radio notes:

Veteran Seattle rock-radio host Cathy Faulkner has returned to the airwaves. She's now heard 7 p.m.-midnight weekdays on KJR-FM (95.7).

KPLU-FM (88.5) presents its annual Christmas Jam concert, featuring Greta Matassa and her quartet and the Pacific Lutheran University Jazz Ensemble, at noon today.

Jim Wilke's "Jazz Northwest" at 1 p.m. Sunday on KPLU-FM features a recent performance by the Seattle Repertory Jazz Orchestra, featuring saxophonist Jimmy Heath conducting and playing in the world premiere of his composition "The Endless Search."

Lizz Sommars' guests on "Conversations" at 6 a.m. Sunday on KISW-FM (99.9), KBSG-FM (97.3) and KKWF-FM (100.7) include Joan Roughgarden, author of "Evolution and Christian Faith."

The Sunday edition of Jim French's "Imagination Theatre," heard at 8 p.m. Saturday and Sunday on KIXI-AM (880), includes the grand prize winner of its script-writing contest, a home-front story set in the last days of World War II, "Rationed."

"The Old Country" at 7 p.m. Sunday on KBCS-FM (91.3) features local group The Wilders.

Mayor Greg Nickels takes listener calls at 10 a.m. Monday on "Weekday" on KUOW-FM (94.9).

Sound Transit Director Joni Earl takes listener calls on "The Conversation" at 1 p.m. Tuesday on KUOW-FM.

"Voices of Diversity" at 6 p.m. Wednesday on KBCS-FM looks at the issue of separation between church and state.

P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattlepi.com.

Bill Virgin's Radio Beat Thursdays in the Seattle P-I
Those who danced were thought to be quite insane by those who couldn't hear the music.
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