Source: Sirius XM on Twitter. 

Howard Stern has a big decision to make in the coming weeks. Does he extend his deal with Sirius XM Radio (NASDAQ: SIRI), building on his legacy as the most magnetic personality on satellite radio over the past decade? Does he step down? Does he sign somewhere else?

The first option is clearly to stick with Sirius XM. Satellite radio gives him the freedom that he never truly had in the regulated realm of terrestrial radio, and Sirius XM has been flexible enough to let Stern scale back on the number of shows he's broadcasting. That's the kind of flexibility that would seem to make outright retirement less of an option, and it also makes it less likely that he goes back to his AM and FM roots, since traditional radio operators would want more live shows.

Stern's likely stiff price tag -- he was making roughly $100 million a year during his initial five-year deal -- is another reason he won't fit into terrestrial radio. A radio ad isn't the kind of moneymaker it used to be.

This doesn't mean it will be Sirius XM or bust for Stern. Former Sirius XM CEO Mel Karmazin was on CNBC's Squawk Box last week, and one of the things that he suggested was that Stern may strike a licensing deal with Netflix (NASDAQ: NFLX). 

Stern on Netflix would be interesting to say the least. He's a radio host, sure, but there's been a visual component to his radio show for decades. With Jon Stewart inking a deal last week to generate short-form content for Time Warner's (NYSE: TWX) HBO, why wouldn't Netflix go even bigger with Stern? This could even usher in a new era where Netflix launches a streaming audio platform to entertain subscribers when they don't have access to an actual screen.

It's never going to happen. For starters, Netflix probably already thinks it has its own Stewart to take on Time Warner. It inked a deal with Chelsea Handler last year, and that calls for a new nighttime show to air exclusively on Netflix starting next year.

Let's also not forget that Stern's show has been a morning talk show for ages. It works on radio because that's where the commuters are. Most of Sirius XM's 29 million subscribers tune in to satellite radio exclusively in their cars. Netflix will need to make a big push for mobile radio if it wants to make this work -- at least the way Stern's show is currently constructed. We also shouldn't forget that outside the deal with Handler, Netflix has sworn off any kind of live content. It wants its programming to have an eternal shelf life, explaining why it hasn't opted for sports, news, or late-night shows outside Handler.

This could all change, of course. Stern's show could revolve around weekly interviews, something that may still be dated, but at least there would be more replay value than a traditional morning or late-night show. It could also be the same kind of "clip culture" mindset that drove Time Warner to team up with Stewart. This would give Stern the flexibility and shorter hours that he inevitably craves, but it will naturally come at a lower price. That's why all signs point toward having Stern extend his deal with Sirius XM before it runs out in early January.

Editor's

Rick Munarriz owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool recommends Time Warner. 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.