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With all that is going on, in the industry, what do you think Sirius should do?




Should Sirius-XM (SIRI) Fire Their Jocks?

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* April 24, 2009

In the early days of satellite radio, digital (non-terrestrial) radio was doing everything it could to be the anti-radio. One of the most heated debates in the digital radio sphere was over on-air talent. In order to compete with Apple iPods - 170,000,000 of them today and growing - Sirius thought long and hard about dumping their jocks to make more compelling music channels. Ultimately, most channels retained the jocks, as the move was too radical to swallow for the terrestrial radio executives who now run Sirius-XM.

In late 2008, Sirius and XM got their regulatory wish to consolidate (so much for that anti-radio kick) and proceeded to basically tank many of the better Sirius music channels for the XM style of "no playlist is too large." Sirius subscribers who came for the better music are looking at the higher rates and increasingly lousy programming and considering dropping their pay radio subscriptions for free FM radio or their iPods.

Sirius-XM has a big problem on their hands with their newly awful programming but, like every other radio company that made it through the consolidation of the late 1990s, Sirius-XM has an even bigger problem, which is crushing debt. While terrestrial stations simply were overpaid for by the likes of Randy Michaels of Clear Channel and Mel Karmazin, then of CBS, now the CEO of Sirius-XM, the single satellite provider has to pay to keep expensive satellites in space, which is no small cost. Sirius-XM got thrown a lifeline this spring for one debt payment, but others are coming and Howard Stern can only float the entire network for so long.

Even consolidated, I am not sure Sirius-XM can make it, as their core product outside of the Howard Stern Show is just not that compelling. They have hundreds of channels that fight the time-tested truth that big playlists don't get better ratings. Many of Sirius-XM stations are oldie stations with a niche angle, such as the music of the 1980s or classic rock or music of the 1950s, etc. To be clear - a decade is not a musical genre. Someone who likes disco might go to the '70s channel, but she might not want to hear Led Zeppelin next, despite the success Zeppelin had in the 1970s. Eclectic isn't really a good format. Sirius-XM badly needs to look at what types of music their subscribers want to hear. For example, is the music of the 1940s really better than having another niche classic rock station?

Put a fork in Sirius-XM if they lose Howard Stern, whose contract is up in a little over a year. Sirius made Stern an insanely wealthy man, as well as the uncensored freedom to grow his show, but if he leaves to do his own podcast (for example), Sirius will be like a struggling shopping mall that just lost its anchor store. They will be deader than a doornail. They could rid themselves of Oprah's radio channel and Martha Stewart, as those entities have other media that they do better on television and in print magazines, but Stern is the key to Sirius-XM. Karmazin, who worked with Stern at CBS, knows this in his DNA.

Perhaps to cut costs and unfortunately to add to the unemployment lines, Sirius-XM should readdress the issue of their music channels and the jocks on them. While the programming of Sirius-XM needs to be drastically improved for long-term success, I am not sure that hokey FM jocks are needed on many of the music stations. Considering my age, the music of the 1980s is what I grew up on, but the idea of ex-MTV VJ Martha Quinn blabbering on about living in Malibu and telling inane stories about the old days or what aging '80s pop stars are doing makes me want to cancel my subscription. The 1980s movie sound effects are even worse. When an '80s station is defined as an oldies format, the playlist should reflect the best music of the era. The core records always play. Currents cycle in and out and the channel is as advertised. With some good production values (not TV themes and other gimmicks that just sound silly), GenX listeners will be drawn in. Do they need jocks? I suggest not. Who the stations need to spend money on are programmers who understand just how bad the music channels are at Sirius-XM and know how to fix them.
 
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