November 23, 2004

Stern Sells Sirius

The Late Show with Dave Letterman had Howard Stern as a guest last night (actually last week in the US).

I had been eagerly awaiting this interview, as to understand how big of a move this is by Howard, and to help me understand the impact this move will create in America. Sure, the whole thing was an ad for Sirius Radio but I think if paying for it gets the bigger message across that radio listeners now have a choice - and a far superior one compared with the limits that existing terrestrial american radio serves up - its money well spent by Sirius. XM should thank Sirius too.

Howard made no bones about sticking his neck out and taking a huge risk with digital radio - especially when it seemed like he was begging toward the close of the interview, although his point was made and nailed. For 40 cents a day, the product is far better and you'll get over 100 channels of YOUR music, WITHOUT commercials and you can get Howard Stern uncensored and unrestricted by the FCC (radio restrictions tightly controlled by the US Government). Now if I could pay a body here in NZ 40 cents a day to be rid of commercials - where I do sign up? Y'know Howard, we share the same birthday....

Stern is certainly worth his $500 million contract and I believe every American radio announcer would have watched that interview with great interest, as Stern sent a direct message to them, saying that Digital Radio and the networks that provide the hundreds of different genres and radio formats on this digital platform offer so much more freedom and greater rewards for a radio broadcaster than they'd ever get with their existing contracts and current employers. Listeners would respond more positively and become excited about radio again, even passionate about it. Radio personalities would have a much better chance at creating better radio and grow so much more on a professional level if they thought seriously about joining up. Sirius has even been recognised by one of the music industrys biggest critics - Eminem. He even has his own channel "ShadE45", programmed by.. him.

It slightly saddens me that I've not heard much response from our own industry about this.

Radio has become increasingly dull in the USA over the last fifteen years, as corporate giants such as Clear Channel have aquired so much of the media and entertainment business across the USA, threading strings to every product they have in an effort to maximise the companies reach and ultimate control of the industry. That is a great idea as a business model, but unfortunately radio became but one element of an empire, and the glory of radio perished when they failed to support its lovechild and lost the plot along the way.

Innovators, frustrated listeners and now giant-size personalities are fed up with the prehistoric restrictions placed upon them. They want to reach their goal of creating, and continuing to create great radio for an audience who demand it. Who could ask for anything else? Yes, I would happily pay for it if I got what I asked for.

Howard used the example of cable television in the USA. CNN and HBO are classic examples of how such risk, innovation and ultimately - demand, evolves a medium and forces change and creates opportunity, rather than restrict it. The same goes for Sky TV here, and I believe it will be the real boom for radio here as well.

I watched this show with great interest for another reason also. Digital Radio is but a draft concept in New Zealand at the moment. Clear Channel own over 50% of the NZ Radio Market here and everyone in our industry is very aware of it (or should be!). Digital Radio has the potential to stop the continuing deregulation and bulk overseas ownership of our radio market, although the products are not all bad, this will catch its decline before it gets to the horrific state that the USA currently have.

The paper on Digital Radio in New Zealand is in suspended animation at the moment, because there are a lot of issues surrounding the cost of implementing into our system. We're merely scraping the surface of the beginnings of Digital Radio here at the bottom of the world, as Simon Morton touched on the topic also.

The other interesting result of Digital Radio which I feel needs discussion, is what will become of the old 'advertising campaign' - where do advertisers go once radio ends up commercial free?

Will Digital Radio create a new revolutionary way to get a clients product 'out there', or will the concept of having radio as an advertising medium completely vanish?

1 comment:

Daniel B. McClelland said...

Hello. Just passing through. That was a fascinating read.