Apparently, you can go too far on satellite radio. XM Satellite Radio (NASDAQ:XMSR) is taking The Opie & Anthony Show off the air for 30 days, in response to some tasteless comments the shock jocks aired earlier this month.
After last month's Don Imus episode, cracking down on a controversial radio show isn't surprising. What is shocking is that a crackdown took place on satellite radio.
XM knew what it was getting, after all. Even the press release that introduced the show to XM's programming slate three years ago called the team of Gregg "Opie" Hughes and Anthony Cumia "edgy," "irreverent," and "controversial."
The satellite-radio service even initially offered the show as a premium add-on service. When XM bumped up its monthly subscription rate from $10 to $13 two years ago, it went ahead and made O&A part of the standard offerings.
However, the show's home on channel 202, dubbed "the Virus," has always carried the XL prefix -- the "explicit language" warning tag that XM places on uncensored talk, rock, and hip-hop stations. Listeners know what they're getting into, and parental controls can block the potentially offensive channels.
The O&A bit that led to the suspension is certainly raw. Having a character on the show describe a violent sexual assault on Condoleezza Rice before moving on to Laura Bush is brutal. But who is to blame when you market a show based on its shock value, only to get exactly what you bargained for?
Like FM, like XM
Both Imus and the O&A duo publicly apologized for their comments, and CBS (NYSE:CBS) and XM initially went along with the apologies before dishing out harsher punishments a few days later. We know why CBS buckled. Vocal critics of Imus led to sponsor pullouts. It was a business decision. But the same can't necessarily be said of the XM move. Is satellite radio simply aping its terrestrial counterparts?
Online message boards devoted to O&A -- and the more restrained The Ron and Fez Show that shares the channel -- were burning up last night. Many irate fans mentioned calling XM to deactivate their receivers, but then they were reportedly offered a free month's worth of service to wait out the suspension. As word spread that this was a great way to save $13, many subscribers who were unlikely to walk probably called up for the freebie. In short, this is a Virus virus that may very well contaminate XM's current quarter.
But since no one is expecting a miracle out of XM, could the service be aiming for longer-lasting effects? Is XM trying to spruce itself up as the more wholesome alternative to the Howard Stern-led Sirius (NASDAQ:SIRI)? If so, it could be a mistake, because Oprah Winfrey's ballyhooed arrival last year did little to improve XM's sluggish subscriber acquisition and retention efforts.
Actually, the more plausible theory is that XM is positioning itself as a vigilant self-enforcer, to get regulators to warm up to its proposed merger with Sirius. Yet that would be an even bigger mistake. A deal is unlikely to hinge on how big a ruler XM uses to rap the knuckles of the O&A stars. If the merger is shot down -- and many observers these days expect that it will -- XM, having followed in terrestrial radio's footsteps, will end up alone and disgraced.
Topping controversy with controversy
Assuming that Opie and Anthony return next month, will the show still be as popular on a tighter leash? XM could milk the publicity and point to a triumphant return, but it can hardly play that role while still it's wearing the watchdog outfit.
The plan for now is to fill the dead air with reruns of Ron Bennington and Fez Whatley's show. It's my favorite show on XM, so I don't really mind, but it's going to end up being overkill. Remember when ABC killed Who Wants to Be a Millionaire by shoehorning it into its primetime schedule four times a week? Say hello to Who Wants to Be a Benningtonaire.
In a press release yesterday, XM claims that it's taking O&A off the air for a few weeks after the morning show's hosts failed to take their apology seriously. "Comments made by Opie and Anthony on yesterday's broadcast put into question whether they appreciate the seriousness of the matter," read the release.
Nowhere in the release can you find the words "edgy," "irreverent," or "controversial." Good luck, XM, in trying to get folks to pay for flat, reverent, and acceptable.
Rick recommended XM to Rule Breakers subscribers in 2005, but the position was liquidated last year. A 30-day free trial subscription is available for access to the service's active recommendations.
Longtime Fool contributor Rick Munarriz is a Sirius and XM subscriber, but he does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
