Automotive DesignLine Blog
Sirius Satellite Radio gave Howard Stern $220 million in stock for its hitting subscriber goals, thanks to his coming over to the satellite subscription service. My advice to Stern: Cash that in before it tanks.
Now Sirius stock may not dive in a few months or longer, but if you ask me, he's hitched his shock-jock wagon to the Betamax technology of the 21st Century (and he'll laugh all the way to the bank with his $500 million, five-year contract). Why? Well it seems that everyone (at least in sat radio) talks about how the space-based service is competing with, and will do in, "terrestrial" radio. But that fails to see the real competition for satellite servicesportable electronicsa la the ubiquitous iPod, that allows listeners to take with them the music they want and not what some programmer thinks they want.
To add to the competition, Motorola has just announced a subscription service that will furnish music to such portable devices. But even they may be going down the same road and just take longer to get there. So unless the satellite radio providers supply services other than just commercial free radio (and it looks like some are starting to realize this with real-time traffic/navigation data prospects), once the initial adopters and those with need to have a jolt of Stern's adolescence to wake them are on board, growth may not be enough to turn a profit for sometime (except for Howard, of course).