Yesterday's suspension of morning radio celebrity Don Imus is a hot topic. Both CBS
As an investor, the question that I keep asking myself is how this would have played out had Imus been on satellite radio. It's not my place to gauge the insensitivity of what Imus said about the Rutgers women's basketball team. I'll leave that up to you. My point is only that similar racially charged comments wouldn't have been as hot a topic had Imus followed Howard Stern and Opie & Anthony to the satellite-radio stage.
The end of terrestrial radio as we know it
Stern bolted from terrestrial radio after one too many fines and the promise of a fatter payday on Sirius
The disparity between what is allowed on conventional AM and FM radio and the looser leashes on satellite radio is significant. It's not just about the expletives, which any O&A or Stern fan will be quick to agree are a privilege that neither show abuses. The wider canvas simply gives the shows the opportunity to expand and experiment before a receptive audience of subscribers.
In the terrestrial world, Stern & O&A were tagged as shock jocks. Now they're simply satellite-radio morning show stars. The reach may be limited -- for now -- but the boundaries are less restrictive.
Will Imus bolt to satellite radio?
If Mel Karmazin or Gary Parsons calls, will Imus answer? This isn't even on the table at the moment. Imus is still contractually bound to CBS Radio. However, just as XM brokered a deal to get O&A on terrestrial radio for the first few less ribald hours of the morning show last year, it's not out of the question to see the talent exchange program flow both ways.
XM used to carry the Microsoft
O&A have been supporters of Imus over the years, so it wasn't much of a surprise to hear them back their friend this morning. They were quick to turn the controversy around, picking out song lyrics to point out how four of the top ten rap songs refer to women as "hos." That may not address the racially charged aspect of the remark that led to the two-week suspension, but it's a safe bet that any salty discourse that takes place on XM or Sirius usually stays there.
Satellite radio is more than just the Las Vegas of radio
Whatever happens in satellite radio, stays in satellite radio? That's not much of a marketing campaign, but it may explain the allure. This is an industry that was birthed just a few years ago and has already landed 13.6 million subscribers. XM and Sirius expect to combine to add another 3.5 million net new subscribers this year.
Terrestrial radio has been able to weather the storm. Even as market leader Clear Channel
Mainstream radio won't die, despite Apple
You may hate Imus. You may love Imus. But as interesting as these next two weeks will be, the really intriguing thing for investors is what happens at the other end of Imus's two-week suspension.
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Longtime Fool contributor Rick Munarriz is a Sirius and XM subscriber. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. XM is a former Rule Breakers selection. Rick does not own shares in any of the companies in this story. The Fool has a disclosure policy.