The radio arm of CBS
In a story that was initially reported in yesterday's Philadelphia Inquirer and followed up on by Forbes and Reuters, the same tandem that was booted from CBS-owned radio stations is coming back for a two-year deal to help rescue CBS from its morning syndicating woes.
It's going to be a tricky balance for all parties involved. Supposedly, Opie & Anthony will continue to do a five-hour, uncensored show on XM, with a bleeped-up, three-hour chunk being delivered to the CBS markets in need, like New York City and Philadelphia.
By losing its exclusivity on Opie & Anthony, XM better be richly compensated. One of the reasons Stern has been such a successful draw on Sirius -- with Sirius landing more net new subscribers over the past two quarters than the larger XM -- is that you can't hear Stern's morning show anywhere else but on Sirius. With Opie & Anthony back on free ad-subsidized radio, few may be willing to pay a premium to XM for a shot at going behind the beaded curtain to hear the two work dirty.
That's because folks aren't flocking to Sirius to hear Stern work blue. As conventional radio stations like CBS and Clear Channel
XM needs to focus on building a better moat, and that means more exclusive content. It had no choice but to share Oprah Winfrey with the larger television audience, but Opie & Anthony are a different case entirely. Sharing the risks devalues the product when something so much more than a free sample at a mall food court is being dispensed. Why lend a hand to a competitor slowly sinking in quicksand? If it isn't a fair trade, don't you dare sign on that dotted line, XM.
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Longtime Fool contributor Rick Munarriz is a Sirius subscriber, but he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.