A new satellite radio channel was born this morning.
Entertainment Weekly Radio kicked off with the latest Sirius XM Town Hall entry -- a chat with movie and Broadway star Hugh Jackman -- but this isn't one of the countless temporary channels that the media giant rolls out to promote a superstar's new release or milestone. Channel 105 on the Sirius and XM dials will be hosting Entertainment Weekly Radio indefinitely.
It's a win-win for Sirius XM and Time Warner.
Sirius XM is getting a recognized brand in developing programming that will dabble in pop culture news, reviews, and scoops. With 24/7 programming hosted by the weekly magazine's editors and celebrities, Sirius XM can offer another alternatives that commuters just can't find through terrestrial radio, downloaded podcasts, or streaming apps.
Time Warner gets an outlet to extend its magazine's brand and ideally increase subscriptions. We all know the state of print publications these days. Any incremental revenue that a magazine can generate makes it that much unlikely that it will get scrapped. It may be surprising that Time Warner went with Entertainment Weekly instead of its more widely known People magazine, but the branding probably makes more sense with the publication that it chose to ride this opportunity.
We're also seeing the power of premium radio flex its muscles again. Brands know that Sirius XM reaches 24.4 million subscribers that are willing to pay up for entertainment. Pandora (NYSE:P) may reach a far larger audience of more than 70 million active monthly listeners, but just 2.5 million of those users are actually paying for the service. Someone willing to pay $15 a month for satellite radio is also someone likely to spend money on other products and forms of entertainment.
That appeal also makes this a smart move for Time Warner. Entertainment Weekly Radio won't have a problem nabbing big stars to talk on the air with its editors and Survivor winner Jenna Morasca. Naturally, it will only be a sliver of Sirius XM's 24.4 million users tuning in, but it will more than likely be the pro-entertainment crowd that would buy tickets to see a new movie during its opening weekend or to check out a cable network's new show.
Everybody wins, even if it's not all that entertaining to read a story where everybody's a hero and nobody's a villain.
Longtime Fool contributor Rick Munarriz and The Motley Fool have no position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.