Has Stern Lost His Touch?

I became a Sirius (Nasdaq: SIRI  ) satellite subscriber in 2004, because I was both a fan of football and Howard Stern. I can probably get passionate about both, but since the late-season revival of my Miami Dolphins probably doesn't matter much to you, I think I should voice my concerns about Stern on Sirius.

Don't get me wrong -- the cost of Stern's contract over the next five years is money well spent for Sirius. The company's market cap is about $3 billion greater today than it was when the Stern deal was announced; that's six times the cost of Stern's $500 million deal. Even though XM Satellite Radio (Nasdaq: XMSR  ) has enrolled more new users than Sirius since Stern's contract was signed back in October 2004, Sirius took the lead this past quarter in anticipation of Stern's arrival last month. The current quarter promises to be another good one.

However, after spending the past few weeks catching chunks of his show, as well as the rest of the programming on the two channels devoted to Stern, I do have my concerns.

As I feared, the show has been a bit lacking so far. Predictably, the first wave of chronic callers just hasn't been as entertaining as the waves of kooky characters that used to call in when Stern was on terrestrial radio. When you drain the gene pool of all but those who are able to afford satellite radio subscriptions, you'll be challenged by a more milquetoast call-in experience. The celebrity interviews -- which feature Stern at his finest as he asks the zingers that no one else dared to ask -- have been infrequent. That's left too much time for the bickering between Stern's crew. Some call that "good radio," but I can't be the only one who finds the self-awareness voyeuristically unfulfilling.

The shows are longer, as a welcome result of shorter commercial breaks, but Stern's show now runs just four days a week. Then you have the demystifying process. JumpTheShark.com's Jon Hein and producer Gary Dell'Abate host a show after Stern's live show that picks apart the highlights and minutiae of the earlier broadcast. Jon and I exchanged a few emails many years ago when he was interested in teaming up with Fool.com to produce a stock-based version of his popular site -- an idea that I still think would have been great -- and he's the perfect choice for this show. Jon and Gary are the two most centered members of the Stern crew, and their personalities play perfectly into the daily wrap-up show. The problem is that pulling back the curtain -- and offering 24/7 newsy dissections -- does the flagship show no favors.

Satellite radio is like cable access for yuppies -- but so are free podcasts. There's no point in peeling back the layers of the Stern mystique, especially now that the boundaries for outlandishness are no longer there to give Stern a reason to rage against the terrestrial radio machine. Stern just hasn't been as entertaining as when he was toiling away under Viacom's (NYSE: VIA  ) more restrictive shackles.

I hope it's only temporary. Satellite radio is a booming industry that is still early in its growth cycle, and I think both players are going to be huge winners in the long run. XM was even a Motley Fool Rule Breakers newsletter recommendation last year. I've got no plans to trash my Sirius radio; I think Stern and Sirius will ultimately get it right. Big stars and social misfits are like putty in Stern's capable hands, and his current show is an artwork in process. Let's hope that it's a masterpiece in the making, because now that Stern's audience is smaller, he has to make sure that he continues to set water coolers a-buzzing, if only to remind non-subscribers of what they're missing.

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Longtime Fool contributor Rick Munarriz is a Sirius satellite radio subscriber. He does not own shares in any of the companies in this story.The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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