Satellite-radio star Howard Stern is negotiating in public again.

The meatiest draw to Sirius XM Radio (Nasdaq: SIRI) shared some thoughts with his listeners yesterday. His five-year contract ends this year, and no one -- perhaps even Stern himself -- knows where he'll be come January.

On the one hand, Stern is publicly considering launching his own streaming app -- where smartphone and computer users can pay a few bucks a month to hear his show. If he stays with Sirius, he prefers to sign annual extensions instead of a new five-year deal. The media market continues to evolve, and he'd hate to be shackled to satellite radio if other popular content creators strike out on their own, digitally.

Don't panic, though.

On the other hand, Stern is also discussing adding a third channel to his Sirius XM network -- one that will likely revolve around music. Bringing up Sirius expansion in the same breath as he ponders bolting isn't the tact of someone who is bent on leaving. He wants CEO Mel Karmazin to know that he can offer feast or famine to Sirius XM. The ball, it seems, may actually be in Sirius XM's side of the court.

We walk from here
We can't dismiss Stern going the indie route.

"The more tantalizing option, of course, is that Stern is ready to break out on his own," I wrote last summer. "The success of Internet radio apps will make satellites unnecessary in a smartphone future. He can launch his own premium network and broadcast into computers everywhere."

Yes, everywhere. Stern can go global, something that he can't do given the licensing and satellite restrictions of where he hangs his hat now.

Portable connectivity continues to grow. Apple (Nasdaq: AAPL), Research In Motion (Nasdaq: RIMM), and smartphones powered by Google's (Nasdaq: GOOG) Android keep adding millions of new wireless subscribers every month.

It's not just smartphones. Sierra Wireless (Nasdaq: SWIR) and Novatel (Nasdaq: NVTL) have mobile hotspots being sold through leading wireless carriers. Unlimited bandwidth can be had for as little as $40 a month, enough to power several Wi-Fi-ready devices. A commuting buddy with one of these things is enough to connect his entourage's collection of iPod touch players, laptops, and tablets.

If this scenario seems like a slam dunk, think again.

Wear comfortable shoes
I was one of the earliest analysts to suggest the app route, so I may as well be one of the first to rain on the stream parade.

As cool as this all sounds, it's still uncharted territory. Premium subscriptions for streaming content services exist -- Sirius XM has had one itself since last summer -- but they don't seem to be gaining a whole lot of traction.

There is also the matter of commitment.

When Stern left terrestrial radio five years ago, he did so with a chip on his shoulder. He had something to prove.  

Things are different now. Sirius XM has paid him well, $500 million in compensation over the past five years. The FCC isn't hanging on his every word in the freer realm of satrad. He may very well make it his mission to prove that there is a better broadcasting medium than satellite radio, but it's not as if he's being shushed by media executives. Unlike his time at CBS (NYSE: CBS), he knows he has a believer in Karmazin. Life is more Velveeta than vendetta for Stern at Sirius XM -- and he knows it.

However, the biggest stumbling block for Stern may be Stern himself. He's 56, and yesterday he indicated he'd like to work fewer hours. If he's planning on just 12-15 hours of live content -- with countless weeks off for vacation along the way -- this isn't going to fly if he's trying to champion a new medium. Yes, Stern has the pedigree and the fan base to own the streaming space -- but is he hungry enough to make it happen?

This is how it will all go down
Regardless of his assertions yesterday, it would be a shock to see Stern leave Sirius XM entirely. He's going to sign a shorter deal with lighter appearance requirements, but with perhaps more wiggle room to test out new forms of striking out on his own.

Who knows? Stern may very well do both. He can go the premium app route, but syndicate the content back through Sirius XM. It will at least buy Sirius XM time until it finds a magnetic celebrity to take his place -- something that is inevitable in every media situation.

Finding a way to play both fields also gives Stern an easy out if premium streams don't pan out. Oh, and Stern knows how to play both sides -- it's what he did yesterday in his public negotiations.

Where do you think Stern will be come 2011? Share your thoughts in the comment box below.

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Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any of the companies in this story, except for Novatel Wireless. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.