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Stern's Move to Satellite Radio Is a Signal Event

By Frank Ahrens
Washington Post Staff Writer
Friday, October 8, 2004; Page E01

Though Howard Stern's defection from broadcast to satellite radio is still 16 months off, the industry is already trying to figure out what will fill the crater in ad revenue and listenership that he is expected to leave behind.

Stern -- who has about 12 million listeners a day -- has been one of the radio's top earners for several years. He is responsible for about $100 million in annual ad revenue for his syndicator, Infinity Broadcasting, owned by media giant Viacom Inc.

Howard Stern shifts to Sirius in 2006. (File Photo)

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In January 2006, he plans to take that revenue machine, and probably many listeners, to Sirius Satellite Radio, where his often raunchy show won't be constrained by the decency standards of the Federal Communications Commission.

Some radio executives counseled calm yesterday, saying that although Stern is talented, Viacom has the resources to replace him.

"What did it mean to late-night TV when Johnny Carson left?" said David J. Field, chief executive of Entercom Communications Corp., which owns 100 radio stations. "The reality is, that was not the demise of late-night TV."

But others said the AM and FM industry will be hit hard, not only because of the loss of one of its most popular broadcasters, but also because AM and FM are at a perilous point.

The nation's two satellite radio companies, XM and Sirius, have about 3.1 million paid subscribers between them. They charge $9.95 and $12.95 a month for access to more than 100 largely commercial-free stations on special receivers that cost around $150.

The Stern deal, according to one of its architects, could transform the industry.

"This deal has the potential to turn FM into AM and AM into shortwave," said Walter Sabo, president of Sabo Media and a consultant to Sirius. Sabo was a member of the Sirius team that lured Stern.

Sabo compares AM and FM vs. satellite today to AM vs. FM 30 years ago.

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