Monday, March 8, 2004

Howard Stern’s threat to move his syndicated radio program to satellite radio would boost a fledgling medium with a small but growing subscriber base.

The move would be similar to those by George Burns and Jack Benny, two radio stars who helped usher in a new era in entertainment in the 1940s when they moved to television. At the time, TV sets were a luxury afforded by only the very wealthy, but the popularity of Mr. Burns and Mr. Benny helped spur sales of sets to working-class families.

“The movement of Howard Stern would be transformational for the industry,” said analyst Kit Spring, who studies satellite radio for Stifel, Nicolaus & Co Inc., a financial services firm in St. Louis.

Since Clear Channel Communications Inc., the nation’s largest radio broadcaster, pulled Mr. Stern’s program off six of its stations last month, the popular radio host has talked on the air about moving his syndicated program to satellite radio, which reaches about 2 million listeners nationwide.

Because the Federal Communications Commission (FCC) does not place the same restrictions on satellite radio programming that it does on the broadcast airwaves, Mr. Stern is likely to have more freedom to do the adult-oriented material that has made him a favorite target for regulators and critics.

Mr. Spring and other analysts predict that the industry will have 20 million to 25 million subscribers by the end of the decade, but that Mr. Stern or another performer of his caliber could accelerate the industry’s growth.

Gregg “Opie” Hughes and Anthony Cumia, two Stern clones fired in 2002 by Infinity Broadcasting Corp. after they staged a sex stunt at St. Patrick’s Cathedral in New York, are said to be planning a move to satellite radio.

Mr. Stern reaches about 15 million listeners a day, making him one of the nation’s most popular radio hosts. His program features naughty banter and is geared toward adult listeners, and he has parlayed his fame into other careers, including publishing, filmmaking and television production.

Critics have long accused Mr. Stern of crossing the line of good taste, such as in a notorious incident in 1982 when, while working as a disc jockey in the D.C. area, he poked fun at Air Florida after one of its planes crashed into the 14th Street Bridge.

Clear Channel dropped his program Feb. 26 after a caller made lewd racial and sexual comments. Infinity, which distributes Mr. Stern’s show, paid the FCC $1.7 million in 1995 to settle a series of complaints the agency made about the program.

Two companies — XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. — sell listeners the small satellite receivers and antennas they need to pick up their signals.

XM, based in the District, offers 100 channels — many commercial-free — that are devoted to such genres as rock, classical and international music, as well as news, talk and sports. The monthly subscription fee is about $10.

New York-based Sirius offers about 60 channels of music and 40 channels of news, talk and sports for about $13 a month.

Spokesmen for both companies would not comment on whether they have spoken to Mr. Stern, and both said their industry will grow with or without him.

“But we also feel that one of the best ways to grow is to develop our own signature programs, much the way HBO has done with ‘The Sopranos’ and ‘Sex and the City,’ so we wouldn’t turn him away,” said Sirius spokesman Ron Rodrigues.

Mr. Stern’s agent, Don Buchwald, could not be reached.

On his program Friday, Mr. Stern predicted that he will be fired soon because the FCC reportedly is preparing to sock Infinity with a new round of heavy fines for airing indecent material.

“They’re doing it, and it starts today,” he said.

Mr. Stern offered to move to satellite radio a few years ago, but the companies turned him down because his $30 million asking price was too steep, according to Tom Watts, an analyst for SG Cowen Securities Corp., a New York securities and investment firm.

“Given the fact that he’s being shut out of traditional radio, the question is: Is he willing to drop his price?” Mr. Watts said.

Mr. Stern has long complained about the limitations of doing an adult-oriented program on broadcast radio. He still could do a satellite program, even if he doesn’t give up the medium that made him famous, Mr. Watts said.

“Maybe he does his PG program on the radio and does his R-rated show on satellite,” he said.

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