Since Sirius XM Radio (Nasdaq: SIRI ) has a starry-eyed dog as its mascot and is named after the bright Dog Star, it's only fitting that Chris "Mad Dog" Russo should make the satellite-radio provider his new home.
The star of sports-talk radio signed a five-year deal with Sirius yesterday. Sure, this isn't as big as inking Howard Stern or Oprah Winfrey, but it's significant as the first major programming acquisition since the completion of the merger between XM and Sirius. When Russo's show hits the airwaves next month, it will be broadcast on both services.
The potential to reach as many as 18.6 million combined XM and Sirius subscribers is something even Stern and Winfrey don't have -- yet. And it shows how Sirius XM will be able to save on programming costs by duplicating content.
That obviously won't happen across all of the satellite-radio channels, nor should it. It's in the company's best interest to differentiate XM from Sirius. Most of the medium's new subscribers are coming from new-car sales, and dealers are typically loyal to one brand over the other. The last thing that Sirius XM wants is for the retail market to see both providers as no different from each other.
Still, some overlap in programming will help, especially if what overlaps will help with retention. Sirius and XM have done well keeping churn in check so far, but this is still an industry in its infancy. If XM and Sirius simply mirror one another in a few years, it will be that much easier for the competition to pick it apart.
Yes, there is competition. This is not a true monopoly. Terrestrial radio competes with satellite radio, for one. Why else would mainstream FM and AM stations have been among the more vocal critics against the merger? Now that in-car Wi-Fi routers are hitting the market, free Internet radio and music-discovery sites such as Pandora, Time Warner's (NYSE: TWX ) AOL, and CBS' (NYSE: CBS ) Last.fm will be easier to stream.
The key for Sirius XM is to keep attracting radio stars if the contracts make economical sense. Taking someone away from terrestrial radio -- like Russo -- is a win. The more content Sirius XM controls, the easier time it will have winning over new subs on the basis of exclusive programming.
There's always room for a few more big dogs in the Sirius XM family.
Some other Sirius XM Radio programming notes: